Dear Liz: Hello. I’d like to use my IRA for charitable donations when I’m required to make minimum distributions. The problem I’ve encountered is that I want to use a debit card for donations. I prefer to donate to small art organizations, which are set up for online donations and definitely not paper checks. I found one brokerage that offers an IRA with a debit card but when I spoke with them, they said it can’t be used for charitable donations. I’m at a loss. Do you know of any way to make charitable donations from my IRA with a debit card? It’s 2025! Surely someone has figured this out.
Answer: You’ve missed a key component of how this particular tax break works.
Qualified charitable distributions allow people 70½ and older to donate money from their IRAs directly to charity, without the money being taxed. The donations can count toward the required minimum distributions that must otherwise begin at age 73 (or 75 for those born in 1960 and later).
Note the word “directly.” The transfers must go straight from the IRA to the charity, without passing through your hands. The IRA custodian will be the one to send the money, either through electronic transfer or check.
I’m confused. How is using the debit card linked to the IRA not sending money directly from the IRA trustee to the charity? It is not like the donor is getting a cash advance and handing paper currency to the charity. I can see why the brokerage firms don’t like it: They can’t really know in advance whether the recipient is a qualified charity or not, and thus they can’t keep track of it.
How is it not “direct” if the debit is drawn from the IRA account and paid to the charity? The letterwriter is not taking possession of the funds, any more than if they paid a restaurant tab with a (non-IRA) debit card. Funds go from the account to the charity. I had the same question for the same reasons. No one writes checks anymore, and no one really wants to receive them, or send them through the mail.
*without passing through your hands*
Vanguard sends a QCD check to me from my IRA, so it does in fact pass through my hands. This is acceptable to the IRS because the check is made out to the charity, not to me. I simply forward it to the charity along with a cover memo if needed.
The answer concerning debit cards for QCD’s is partially incorrect. It is true that at this point there don’t seem to be debit cards connected to IRAs, but there are checking accounts with old-fashioned checkbooks. Charles Schwab offers one such account. I am able to write checks directly to charities from my Charles Schwab IRA, without having to go through the IRA custodian. Please inform your readers of this possibility.