What is a Qualified Charitable Distribution (QCD)?

A qualified charitable distribution (QCD) is a payment made directly from your IRA to a charity once you’re at least 70 1/2. The amount is excluded from your gross income for federal income tax, up to an annual limit, and it counts toward your required minimum distribution (RMD) for the year.

The tax benefit is an exclusion, not a deduction. The money never shows up in your adjusted gross income (AGI), so you don’t need to itemize to benefit, and you can’t also claim a charitable deduction for the same gift.

How Does a Qualified Charitable Distribution Work?

You tell your IRA custodian how much to send and to which charity, and the custodian pays the charity directly. The transfer reduces your IRA balance and counts toward any RMD you owe that year, but the excluded amount isn’t added to your income.

If the money reaches you first, it isn’t a QCD. A withdrawal deposited in your bank account and then donated is an ordinary taxable distribution followed by an ordinary charitable gift. One exception: a check drawn on the IRA and made payable to the charity still counts as a direct payment, even if you deliver it yourself.

QCD Rules: Age, Accounts, and Eligible Charities

You must be at least 70 1/2 on the day the distribution is made, not merely turning 70 1/2 later that year. That age is not the RMD age. RMDs begin at 73 if you were born from 1951 to 1959 and at 75 if you were born in 1960 or later, so you can make QCDs for several years before any distribution is required.

QCDs can come from a traditional IRA or an inherited IRA. A Roth IRA is eligible too, but only amounts that would otherwise be taxable can be excluded, and qualified Roth withdrawals aren’t taxable in the first place. A SEP IRA or SIMPLE IRA qualifies only if it’s no longer ongoing, meaning no employer contribution is made to it for that year. Employer plans such as a 401(k) or 403(b) aren’t eligible.

The recipient has to be a public charity eligible to receive tax-deductible contributions. Donor-advised funds, supporting organizations, and most private foundations are excluded. The gift also has to be one you could have deducted in full, so a distribution that buys you something in return, such as a dinner or event tickets, doesn’t qualify.

Two rules can shrink the excluded amount. Only money that would otherwise be taxable can be a QCD. A QCD is treated as coming from the taxable part of your IRAs first, so nondeductible contributions (basis) limit it only if the QCD is larger than your entire pre-tax balance. And if you deducted traditional IRA contributions for any year in which you were 70 1/2 or older, those deductions reduce your excludable QCDs dollar for dollar until they’re used up. Deduct a $7,500 contribution at 71, send $10,000 to charity as a QCD at 72, and only $2,500 is excluded. The other $7,500 is taxed like any other distribution.

QCD Limit for 2026

The Internal Revenue Service (IRS) adjusts the QCD limit for inflation each year under the SECURE 2.0 Act.

A split-interest entity is a charitable remainder annuity trust, a charitable remainder unitrust, or a charitable gift annuity that is funded only by QCDs.

The limit isn’t shared between spouses. If you’re married and file jointly, each of you can exclude up to $111,000 in 2026, but only from your own IRAs. One spouse can’t use the other’s unused limit.

QCD vs. a Charitable Tax Deduction

A deduction reduces taxable income after AGI has been calculated. A QCD keeps the income out of AGI in the first place, and AGI is the starting point for several other calculations:

• Medicare’s income-related monthly adjustment amount (IRMAA) surcharges on Part B and Part D premiums
• How much of your Social Security benefits are taxable
• The 3.8% net investment income tax (NIIT), which applies above $200,000 of modified adjusted gross income for single filers and $250,000 for married couples filing jointly

Whether any of those change depends on how close your income sits to a threshold. For federal income tax alone, the gap is wider if you take the standard deduction ($16,100 for single filers and $32,200 for married couples filing jointly in 2026, before the additional amounts for age 65 and older).

Take a single filer, age 75, in the 22% bracket, with a $20,000 RMD and $10,000 a year of charitable giving. She takes the standard deduction. These are round, illustrative numbers.

The charity receives $10,000 either way. The QCD saves $1,980 in federal income tax in this example and leaves AGI $10,000 lower. If you itemize, the income tax gap narrows, because the deduction offsets more of the withdrawal, though starting in 2026 only giving above 0.5% of AGI is deductible.

You can model a QCD in ProjectionLab as a charity expense paid from your IRA, where it counts toward that year’s RMD and stays out of taxable income.

QCD vs. Donor-Advised Fund

A QCD can’t go into a donor-advised fund (DAF), so the two are alternatives for any given dollar, though you can use both in the same year from different accounts.

A QCD draws down pre-tax IRA money. A DAF is suited to appreciated stock held in a taxable account, where donating the shares also avoids capital gains tax.

How to Make a QCD and Report It

Custodians handle QCDs through their own request form or, at some firms, an IRA checkbook. Ask for the payment to be made out to the charity, not to you. A QCD belongs to the calendar year in which the distribution is made, so December 31 is the deadline for it to count toward that year’s RMD and that year’s limit.

A QCD can’t reach back and change a withdrawal you’ve already taken. If you take your full RMD as an ordinary withdrawal in March and make a QCD in November, the March withdrawal stays taxable. The November QCD is still excluded from income, but there’s no RMD left for it to cover.

At tax time, the custodian sends Form 1099-R showing the full distribution. The form’s instructions now include a code Y for QCDs, but custodians aren’t required to use it for 2026, so the form may look like any other distribution. Reporting the exclusion is up to you. On the 2025 Form 1040, the full distribution goes on line 4a, the taxable amount (zero, if all of it was a QCD) goes on line 4b, and you check the QCD box on line 4c.

Frequently Asked Questions

Can you do a QCD from an inherited IRA? Yes, if you, the beneficiary, are at least 70 1/2 on the date of the distribution. The original owner’s age doesn’t matter: a 60-year-old who inherits an IRA from a 90-year-old parent can’t make QCDs from it yet.

Can a QCD be made from a 401(k)? No. The exclusion applies only to IRAs. Money that has been rolled over from a 401(k) into a traditional IRA can be used for QCDs from the IRA afterward.

Do churches qualify for a QCD? Yes. Churches are among the public charities that can receive QCDs, along with schools, hospitals, and other publicly supported 501©(3) organizations. No income tax is withheld from a QCD, so the charity receives the full amount you request.

What documentation is required for a QCD? You need the same written acknowledgment from the charity that you’d need to claim a charitable deduction, stating the amount and that you received no goods or services in return. Get it before you file; the Form 1099-R from your custodian doesn’t substitute for it.