Qualified Charitable Distributions (QCDs): Giving From Your IRA Tax-Free After 70½

A qualified charitable distribution (QCD) is a gift sent directly from your IRA to an eligible charity once you are at least 70½, and the amount is left out of your taxable income altogether: up to $111,000 per person in 2026, and it counts toward your required minimum distribution.¹ For retirees who already give to charity and have an RMD they do not need, it is one of the few tax rules that is simple, generous, and entirely on your side.

I learned about QCDs embarrassingly late. For years my husband and I wrote checks to our church and the county food bank out of checking, after the IRA withdrawal had already been taxed, and because we take the standard deduction like most retired couples, those gifts saved us nothing at tax time. Here is how the rule works, who can use it, and the paperwork mistakes that undo it, reviewed by a CERTIFIED FINANCIAL PLANNER.

What a QCD is

A QCD is a distribution made directly by the trustee of your IRA to an organization eligible to receive tax-deductible contributions, and it is generally nontaxable.² The money moves from the custodian to the charity without ever passing through your bank account, and because it never counts as income, you do not take a charitable deduction for it.

That exclusion is the whole point. An ordinary IRA withdrawal is taxed as ordinary income; donating it afterward only helps if you itemize deductions, and most retirees do not. A QCD skips the income step entirely, so the tax benefit arrives whether you itemize or not. It is the same total gift to the charity and a smaller tax bill for you.

Who can use it, and from which accounts

You must be at least 70½ on the day the distribution is made, and the money must come from an IRA other than an ongoing SEP or SIMPLE IRA.³ Traditional IRAs and rollover IRAs qualify, and so do inherited IRAs when the beneficiary is 70½ or older.

Notice the age. RMDs now start at 73, but the QCD age stayed at 70½, so there is a window of two to three years where you can give from the IRA before you are forced to take anything out. Giving in that window shrinks the balance your future RMDs will be calculated on, which is a quiet planning advantage.

Workplace plans are not eligible. A 401(k) or 403(b) cannot make a QCD, which is one more reason people who plan to give in retirement roll old plans into an IRA; the mechanics are in the 401(k) rollover guide. One more wrinkle: if you made deductible IRA contributions after 70½ (allowed since 2020 if you still have earned income), the amount you can exclude through QCDs is reduced by those deductions, and the IRS has a worksheet for tracking it.²

How much you can give

The 2026 limit is $111,000 per IRA owner, up from $108,000 in 2025; anything above the limit is taxed as an ordinary distribution.¹ The limit is per person, not per account or per household. If you file jointly and your spouse also has an IRA and is at least 70½, your spouse can give up to the same amount from their own IRA.²

There is also a one-time option most people will never need: a single QCD of up to $55,000 in 2026 to a charitable remainder annuity trust, a charitable remainder unitrust, or a charitable gift annuity funded only by QCDs, which pays you an income in return.¹ It comes with its own reporting statement and strict conditions, so it is a conversation for a planner and the charity’s gift office, not a do-it-yourself move.

How a QCD works with your RMD

A QCD counts toward your required minimum distribution, so every dollar you send to charity this way is a dollar of the RMD you no longer have to withdraw as taxable income.³ If your RMD is $10,000 and you send $5,000 to charity as a QCD, you take the other $5,000 as a normal withdrawal.

Timing matters more than people expect. RMD rules count the first dollars out of the IRA each year toward the requirement, so if you take your whole RMD in January and then decide in November to make a QCD, the January withdrawal is already income and cannot be turned into a gift after the fact. People who plan to give usually make the QCD early in the year, or at least before taking the rest of the RMD. How the RMD itself is figured, and the penalty for missing one, are in required minimum distributions.⁴

The knock-on benefits: Social Security and Medicare

Because a QCD never enters your adjusted gross income, it can also reduce how much of your Social Security is taxed and lower the income figure Medicare uses for IRMAA surcharges two years later.⁵ A charitable deduction does neither of those things, because deductions come off after adjusted gross income is calculated.

Up to 85% of a Social Security benefit can be taxable depending on your total income, and the thresholds are low enough that an RMD alone can push more of it into the taxable column. IRMAA works on income tiers, so a few thousand dollars can decide whether you pay the standard Part B premium or a surcharge for a whole year. For a household sitting just above one of those lines, moving the yearly giving into a QCD can be worth more than the income tax saved on the gift itself. How these pieces interact is covered in taxes in retirement and the guide to the Medicare IRMAA surcharge.

Where the money can and cannot go

A QCD must go to an organization eligible to receive tax-deductible contributions, typically a 501(c)(3) public charity such as a church, a food bank, a hospital foundation, or a university.² You also need the same written acknowledgment from the charity that you would need to support a deduction, including whether you received anything in return.

Some destinations do not qualify even though gifts to them can be deductible. Donor-advised funds and supporting organizations are excluded from QCDs, and so are most private foundations, so check with your custodian or the charity before you send a large gift to a fund rather than to a working charity. Gifts where you receive a benefit, such as gala tickets or a membership with perks, are another common trap, because a QCD has to be the full gift with nothing back.

How to make a QCD without breaking the rules

Ask your IRA custodian for its QCD form, and have the money sent from the custodian directly to the charity, either as a check made payable to the charity or as an electronic transfer.² A check made payable to you, or a withdrawal you deposit and then donate, is an ordinary taxable distribution, no matter how quickly you pass it on.

A few habits keep it clean:

1. Start in the fall at the latest. Custodians get busy in December, and a check the charity has not cashed by December 31 can leave it unclear which tax year the QCD belongs to. Some custodians offer an IRA checkbook, which makes small gifts easier but leaves timing in the charity’s hands.
2. Tell the charity it is a QCD. That way the acknowledgment letter is worded correctly and the gift is credited to you even though it arrives from a brokerage.
3. Keep a simple list. Date, charity, amount, and the acknowledgment letter, filed with your tax papers.
4. Watch the withholding box. If your custodian normally withholds tax from distributions, make sure the QCD form says no withholding, or the charity receives less than you intended.

Reporting a QCD on your tax return

Your custodian reports the QCD on Form 1099-R as an ordinary distribution, because it does not track where the money went, so it is up to you to exclude it on your return.³ On Form 1040 you report the full distribution on the IRA distributions line, enter only the taxable part (zero, if the whole amount was a QCD) on the taxable amount line, and mark it as a QCD.

This is where I see people lose the benefit: the 1099-R shows the gift as an ordinary withdrawal, the tax software takes it at face value, and the QCD is taxed like any other distribution unless someone tells it otherwise. If you use a preparer, hand them the charity letters with the 1099-R and say “QCD” out loud. If your IRA holds after-tax (nondeductible) contributions, the QCD is treated as coming from the taxable part first and you may need Form 8606 as well.²

Is a QCD right for you?

A QCD makes the most sense if you are 70½ or older, already give to charity, and draw from an IRA you would otherwise withdraw from as taxable income; it does little for someone who does not give, and it is not a reason to start giving.² The charity receives exactly what it would have received from a check, so the question is only which pocket the gift comes out of.

For me, the switch was almost boringly easy once I knew it existed. The same two gifts go to the same two places every year, they now leave the IRA directly in early spring, and they count toward the RMD that I do not need for groceries. If you are working out what to do with RMD money you do not need, the broader options are in making your money last.

None of this is personalized tax or financial advice. The figures above are for 2026 and change every year, the details depend on your whole return, and a fiduciary advisor or tax professional can check how a QCD fits your own accounts, your giving, and your Medicare income tier.