Here's How to Skip Required Minimum Distributions the Right Way Without IRS Trouble

Required minimum distributions, or RMDs, can potentially add thousands of dollars to a retiree's taxable income, even when the money isn't needed for living expenses. Simply ignoring the withdrawal isn't an option. The IRS can impose a 25% excise tax on the shortfall, although a timely correction may reduce that rate to 10%. 

A careful retirement plan should account for both the distribution and the other costs that additional income might trigger. The good news is that federal rules provide a narrow path that can soften the impact.

The key is understanding what "skip" really means. You generally can't erase an RMD that's legally due. However, a qualified charitable distribution, or QCD, may let you satisfy part or all of an IRA RMD without including the transferred amount in taxable income. That can be valuable because higher income may affect taxes on Social Security benefits, Medicare premiums, deductions, and other parts of a retirement budget.

Here's how this works.

A QCD satisfies the RMD without adding taxable income

A QCD allows an IRA owner who is at least age 70 1/2 on the date of the transfer to send money directly to an eligible charity. The distribution can count toward that year's RMD, but the qualifying amount is generally excluded from income.

That may be more useful than taking the RMD personally and donating afterward, especially for retirees who claim the standard deduction and receive little or no tax benefit from itemizing charitable gifts. You can't also claim any itemized charitable deductions for QCDs, since that would provide two federal tax benefits for the same donation.

The direct-transfer rule can make or break the strategy

The money must move directly from the IRA trustee or custodian to the charity. You can't deposit the distribution into your bank account first and later write a personal check. For 2026, the total QCD exclusion is capped at $111,000 per eligible IRA owner, and multiple QCDs may go to different organizations as long as their combined value stays within the annual limit.

A QCD generally must come from an IRA, not directly from a 401(k), and ongoing SEP and SIMPLE IRAs usually don't qualify. That distinction matters because someone with a workplace-plan RMD can't simply label a later charitable donation as a QCD.

Other accounts can reduce or postpone future RMDs

Roth IRAs and designated Roth workplace accounts don't require lifetime RMDs from the original owner under current IRS rules.

Additionally, those still working may also be allowed to postpone RMDs from a current employer's 401(k) until retirement if the plan permits it and they don't own more than 5% of the company. That exception doesn't apply to traditional IRAs or old employer accounts, so each balance needs to be reviewed separately.

Know the amount and deadline before year-end

Most 2026 RMDs must leave the account by Dec. 31, 2026. An IRA owner whose first RMD year is 2026 because they turn 73 may delay that first withdrawal until April 1, 2027, but doing so generally creates another RMD due by Dec. 31, 2027.

To estimate the amount, divide the account's Dec. 31, 2025, balance by the applicable factor in the IRS life expectancy table. For example, $500,000 divided by the Uniform Lifetime Table factor of 25.5 for age 74 equals about $19,608.

Bottom line

Would directing some or all of an unwanted IRA RMD to causes you already support be more useful than taking the cash and raising your taxable income? A QCD can accomplish that, but only when the account, age, charity, transfer method, amount, and deadline all satisfy IRS requirements.

Start the process well before December, since custodians and charities may need time to complete and document the transfer. Confirm the organization's eligibility through the IRS Tax Exempt Organization Search, request a written acknowledgment, and review the reporting with a tax professional to lower your financial stress and avoid an expensive correction later.

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