In this guide
What a QCD is (and the 2026 limit)
A qualified charitable distribution, created by IRC §408(d)(8), lets an IRA owner aged 70½ or older transfer money directly from the IRA to a qualifying charity with the amount excluded from gross income. Not deducted — excluded. It never lands on your 1040 as income at all.
For 2026 the annual limit is $111,000 per person (up from $108,000 in 2025; the cap has been inflation-indexed since SECURE 2.0). It's an individual limit: a married couple where each spouse is 70½+ can move up to $222,000 per year, provided each gives from their own IRA. Separately, a one-time lifetime election of up to $55,000 (2026, also indexed) can fund a split-interest vehicle — a charitable gift annuity or charitable remainder trust.
"Weren't charitable contributions from IRAs eliminated?"
No — and this rumor deserves a direct debunking, because thousands of people search for it every month. Nothing in current law eliminated or restricted QCDs. The confusion traces to OBBBA's overhaul of charitable deductions beginning in 2026: itemizers now face a 0.5%-of-AGI floor before charitable deductions count, top-bracket taxpayers see the deduction's value capped, and non-itemizers got a small above-the-line deduction ($1,000 single / $2,000 joint).
Those changes squeeze the deduction route. The QCD isn't a deduction — it's an income exclusion — so it sails past the new floor entirely. If you're 70½+ and charitably inclined, the 2026 rules didn't close your window; they widened the gap between the smart way to give and every other way.
Why a QCD beats a deductible gift
Same $20,000 to the same charity — the route changes your tax return in four ways:
| Effect | Cash gift (deduction route) | QCD |
|---|---|---|
| Works with the standard deduction | No — must itemize (and clear the new 0.5% AGI floor) | Yes — full benefit regardless |
| Adjusted gross income | Unchanged (deduction comes later) | Reduced — the IRA dollars never enter AGI |
| IRMAA, Social Security taxation, NIIT | No help — all keyed to AGI/MAGI | All improved by the lower AGI |
| Satisfies your RMD | No | Yes, up to the limit |
For a retiree taking RMDs and giving anything to charity annually, routing the gift through the IRA first is close to free money — the same generosity, minus the income that would have driven your Medicare premiums and Social Security taxation higher.
The eligibility rules
- Age 70½ — exactly. Not your RMD age. You become eligible the day you actually turn 70½, and gifts before that day don't qualify.
- IRA-only. Traditional IRAs, inherited IRAs, and inactive SEP/SIMPLE IRAs (no employer contribution that year). Not 401(k)s or 403(b)s — roll to an IRA first.
- Direct transfer. Custodian to charity. A check payable to the charity that you hand-deliver is fine; a distribution to your own account that you re-donate is not — that's a taxable withdrawal plus a regular deduction.
- Nothing back. The gift must be 100% charitable — no gala tickets, no benefits, and you need the same written acknowledgment as any donation.
QCDs and your RMD
A QCD counts toward your required minimum distribution dollar-for-dollar, up to the limit. The sequencing rule matters here just as it does for conversions: because the first dollars out of an IRA in an RMD year are deemed RMD dollars, do the QCD early, before taking other distributions. Give in December after you've already withdrawn your full RMD in March, and the QCD is still income-free — but it no longer offsets an RMD you already paid tax on.
Order of operations for a charitable RMD year: QCD first, remaining RMD second, Roth conversion (if any) third. Each step is cheaper in that order.
Which charities qualify
Qualifying: 501(c)(3) public charities — churches and religious organizations, schools, hospitals, community organizations, most operating nonprofits. Not qualifying: donor-advised funds, private non-operating foundations, and supporting organizations. The one carve-out is the lifetime split-interest election above. When in doubt, check the IRS Tax-Exempt Organization Search and ask the charity whether it can receive QCDs — most large ones process them routinely.
How to execute one, step by step
- Confirm you're 70½ on the date of the gift.
- Request the QCD from your custodian — most have a one-page form; specify the charity's legal name, EIN, and address.
- Send it early in the year if you want it to absorb your RMD; either way it must clear by December 31 (checkbook-IRA users: a check the charity hasn't cashed by year-end is a classic fail).
- Get the acknowledgment letter from the charity, same as any gift.
- Report it right. Your 1099-R will show a normal distribution (custodians now flag QCDs with distribution code Y). On your 1040, the QCD portion is subtracted and "QCD" is written next to line 4b — software and CPAs handle this, but check it; custodians don't compute the exclusion for you.
The traps
- The post-70½ deduction clawback. If you make deductible traditional-IRA contributions after 70½, they reduce your allowable QCD exclusion dollar-for-dollar (a SECURE Act anti-abuse rule). Working past 70½ and contributing? Coordinate before giving.
- Re-donating a withdrawal. Money that touches your checking account is income, full stop. The transfer must be direct.
- DAF autopilot. If your giving currently flows through a donor-advised fund, a QCD can't feed it — give directly to the end charities instead. (DAFs and charitable remainder trusts still have their place for appreciated taxable assets — see the charitable strategies in the advanced guide.)
- Assuming the custodian reports it. The 1099-R doesn't say "tax-free." The exclusion happens on your return, or it doesn't happen.
Pairing a QCD with a Roth conversion
For readers of this site, here's the power combination: in an RMD year, the QCD removes your RMD from income entirely — freeing up the bracket room the RMD would have consumed. Converting into that room moves money to your Roth at rates the RMD would otherwise have pushed higher. Charity funded, RMD satisfied, bracket preserved, future RMDs shrunk. We walk through the sequencing in the RMD-and-conversion guide, and the calculator shows what the freed bracket room is worth over a full retirement.