Qualified Charitable Distributions: Giving From Your IRA

A QCD is a distribution from your IRA that your custodian pays directly to a qualifying charity, which is left out of your taxable income and counts toward your required minimum distribution. You must be at least 70½ on the day of the distribution, and the 2026 limit is $111,000 per person (IRS Notice 2025-67). A married couple can each give up to that amount from their own IRAs.

The rules come from section 408(d)(8) of the tax code and are summarized in IRS Publication 590-B. The essentials:

• Age 70½ on the date of the gift, not just by year-end. RMDs begin later, at 73, or 75 if you were born in 1960 or later, so QCDs can start years before RMDs do.
• From an IRA only. Traditional and rollover IRAs qualify; an ongoing SEP or SIMPLE IRA that is still receiving employer contributions does not. A 401(k) or 403(b) cannot make a QCD, so roll the money to an IRA first.
• Directly from the trustee to the charity. If the money passes through your hands, it is an ordinary taxable withdrawal.
• Counts toward your RMD for that IRA and year, and can be larger than your RMD, up to the limit.
• No deduction on top. Because the gift is excluded from income, you cannot also deduct it on Schedule A.

One wrinkle catches people who still work past 70½. If you deduct traditional IRA contributions for years in which you were 70½ or older, the tax-free part of later QCDs is reduced by those deducted contributions, dollar for dollar, until they are used up (IRS Publication 590-B). If you plan to give by QCD, make any late-career contributions to a Roth instead.

Because most retirees no longer get any tax benefit from a charitable deduction, and an exclusion lowers the income figure that several other costs are built on. A married couple who are both 65 or older have a 2026 standard deduction of $35,500. With the mortgage paid off, their state and property taxes plus their gifts often fall short of that, so a check to charity saves them nothing.

The 2026 rules tilt further toward QCDs. Itemizers can now deduct charitable gifts only to the extent they exceed 0.5% of adjusted gross income (IRS Publication 505, 2026). Non-itemizers get a new deduction for cash gifts, but it is capped at $1,000, or $2,000 on a joint return (IRS Topic 506). A QCD has neither limit: the whole gift, up to $111,000, simply never becomes income.

About $5,800 of federal income tax and $2,297 of Medicare premiums, on $30,000 of gifts they were going to make anyway. Robert is 76 and Susan is 73. His IRA held $1,400,000 at the end of 2025 and hers $600,000, so their 2026 RMDs, using the IRS Uniform Lifetime Table factors of 23.7 and 26.5, come to $59,072 and $22,642 (IRS Publication 590-B). They also receive $84,000 of Social Security, a $36,000 pension and $43,000 of interest from CDs and Treasuries. They give $30,000 a year to their church, a food bank and Robert’s university, and they pay $14,000 of state income and property tax.

Writing checks, they itemize: $14,000 of state and local tax plus their gifts less the new 0.5% floor comes to $42,839, a little more than the standard deduction. Giving by QCD, they take the standard deduction instead and still come out well ahead, because $30,000 of income has disappeared rather than been partly offset. The lower AGI also restores part of the senior deduction, which phases out by 6% of income above $150,000.

The Medicare saving is a cliff effect. Their income with cash gifts is above the $218,000 line where the first IRMAA tier begins for joint filers in 2026 (CMS, 2025), which adds $95.70 a month to each spouse’s Part B and Part D premiums two years later. The QCD brings them under it. Our guide to Medicare enrollment and IRMAA lists every tier.

Robert and Susan could give more by QCD than their RMDs, up to $111,000 each. Any QCD above the RMD still leaves the IRA untaxed, which also shrinks future RMDs. It does not, however, carry forward to satisfy next year’s RMD. Our RMD Calculator shows your RMD for the year and how it grows.

By lowering the “provisional income” that decides how much of your benefit is taxed, but only if you are in the range where that share is still rising. The IRS adds half your benefits to your other income. Above $32,000 for a joint return, or $25,000 for a single filer, up to 50% of benefits become taxable; above $44,000 or $34,000, up to 85% (IRS Publication 915). These thresholds have never been indexed for inflation.

Robert and Susan are well past the top of that range, so 85% of their benefits is taxable either way; the table shows the same figure in both columns. The QCD saves them tax on the $30,000 itself, not on their Social Security. It is middle-income retirees for whom a QCD does double duty.

Take Margaret, 78 and widowed, a single filer. Her IRA held $700,000 at the end of 2025, so her RMD is $31,818. She has $40,000 of Social Security and $12,000 of interest, and gives $12,000 a year to her church. She takes the standard deduction.

Her $12,000 QCD lowers her AGI by $22,200, because it also takes $10,200 of her Social Security out of tax. The federal saving is $2,544, or 21% of the gift, although her top bracket is only 12%. In this band, each extra dollar of income makes up to 85 cents of benefits taxable, so a dollar kept out of income saves tax twice. The cash-gift column already credits her the 2026 non-itemizer deduction of $1,000.

Operating public charities: the organizations described in section 170(b)(1)(A) of the tax code, such as churches, schools and universities, hospitals, and publicly supported charities like food banks and museums. The statute then carves out two groups: supporting organizations under section 509(a)(3), and donor-advised funds (26 U.S.C. § 408(d)(8)). Most private foundations fall outside the eligible list as well.

The donor-advised fund exclusion surprises people who use a fund as their giving account. You can still use both: QCDs for gifts that go directly to operating charities, and appreciated stock for contributions to the fund. Before sending a large QCD, look the charity up in the IRS Tax Exempt Organization Search, and ask its gift office whether it is a public charity rather than a supporting organization. Community foundations hold both donor-advised funds and ordinary charitable funds, and only the latter can receive a QCD.

Gifts to individuals, political groups and foreign charities do not qualify, and neither does a payment for which you receive something back. The statute treats a distribution as a QCD only if the entire amount would have been deductible (§ 408(d)(8)(C)), so gala tickets, auction items and membership benefits should be paid for separately. The charity’s written acknowledgment, the same one you would need for a deduction, should state that you received nothing in return (IRS Publication 526).

By asking your IRA custodian to send a check or electronic payment made out to the charity, not to you. Most large custodians have a QCD form online; some offer IRA checkbooks that let you write checks to charities directly from the account.

If the IRA includes nondeductible contributions, a QCD comes first from the taxable part of the account, which is the most favorable ordering for you (IRS Publication 590-B). A QCD from a Roth IRA is allowed but rarely useful, since qualified Roth withdrawals are already tax-free.

A once-in-a-lifetime election, added by SECURE 2.0, to make a QCD of up to $55,000 in 2026 to a charitable gift annuity, a charitable remainder annuity trust or a charitable remainder unitrust that pays income back to you (IRS Notice 2025-67). The amount counts toward your annual QCD limit and your RMD.

The conditions are strict (26 U.S.C. § 408(d)(8)(F); IRS Publication 590-B):

• The annuity or trust must be funded only by QCDs; you cannot add other money to it.
• Only you, your spouse, or both may receive the income, and the income interest cannot be assigned to anyone else.
• A gift annuity must pay fixed payments of 5% or more, starting within one year of funding.
• The payments you receive are taxed as ordinary income.
• You make the election on your return for that year and attach a statement describing the gift.

In practice this is a gift annuity option. $55,000 is small for a charitable remainder trust, which carries legal and annual administration costs, while many large charities issue gift annuities for much smaller amounts. It suits someone who wants to make a meaningful gift now, is content with a fixed income stream for life, and has a charity they trust to be around for decades. If you would simply like more income, a plain income annuity or a larger RMD usually pays more; the gift annuity rate reflects the charity’s share.

Your custodian reports the whole distribution on Form 1099-R, and you mark the QCD on your Form 1040. The IRS added code Y for box 7 of Form 1099-R to identify QCDs, but for 2026 custodians may use it or not (IRS Instructions for Forms 1099-R and 5498, 2026). Many 1099-Rs will therefore show a normal, fully taxable distribution. That is not an error, and it is your return that establishes the QCD.

On Form 1040, report the full IRA distribution on line 4a and the taxable part on line 4b: zero if the whole distribution was a QCD, or the remainder if it was partly a QCD. On the 2025 form you also check the QCD box on line 4c; earlier returns asked you to write “QCD” next to line 4b (IRS Publication 590-B). For the one-time split-interest election, you check a separate box, enter “SIE” and attach the required statement. Tax software handles all of this, but only if you tell it which part of the distribution went to charity.

After 70½, give from the IRA first and keep your appreciated stock, unless you itemize heavily or need to give to a donor-advised fund. The two tools save different taxes. Donating shares held more than a year avoids the capital gains tax on their growth and, if you itemize, earns a deduction at market value, limited to 30% of AGI for gifts to public charities, with any excess carried forward for five years (IRS Publication 526). A QCD removes ordinary income, taxed at your full bracket, and lowers AGI.

Suppose Robert and Susan own $30,000 of an index fund bought for $8,000. Giving the shares instead of a QCD would avoid tax on a $22,000 gain, $3,300 at the 15% capital gains rate, but only if they would otherwise sell. It would leave their RMD fully taxable and their income above the IRMAA line. And if they hold the shares for life, their children inherit them with a basis reset to market value at death, so the gain is never taxed at all (IRS Publication 551). The IRA, by contrast, carries its full tax bill to the heirs. Giving away the IRA and leaving the stock is usually the better order.

QCDs also change the Roth conversion math. If you plan to give a large share of your IRA away, converting it first pays a tax the charity never would. Our guide to Roth conversions before RMDs explains how to size conversions around planned giving, and the one on inherited IRAs and the 10-year rule covers naming a charity as an IRA beneficiary. For gifts to family rather than charity, see gifting to children and grandchildren.