ETFs & Funds
Home›ETFs & Funds›Fund Industry›IRA qualified charitable distributions can reduce Medi…
IRA qualified charitable distributions can reduce Medicare IRMAA surcharges
Directing up to $10,000 of an IRA required minimum distribution to a qualified charity can lower MAGI below the $109,000 single-filer threshold and cut Medicare premium costs by about $1,148 annually, according to Yahoo Finance.
Yahoo Finance describes how a Qualified Charitable Distribution, or QCD, from a traditional IRA can count toward an IRA owner’s required minimum distribution while being excluded from modified adjusted gross income used to calculate Medicare’s IRMAA surcharges.
The outlet says the process hinges on how the check is handled: the IRA custodian must send the distribution directly to the charity, because routing it through a personal account would permanently lose the tax exclusion.
Yahoo Finance also cites the Medicare “cliff” effect around the first single-filer threshold of $109,000 in MAGI, where Part B premiums can move from the standard $202.90 to $284.10 per month, with an added Part D surcharge of $14.50.
As an example, the article says a 73-year-old widow taking an RMD from a $600,000 traditional IRA could have MAGI around $112,000 after Social Security and pension income, and that the QCD approach would be a way to avoid triggering those 2026 Medicare surcharges.