What Are QCDs? Rules, Limits, and RMD Benefits

A qualified charitable distribution is a direct transfer from a traditional IRA to an eligible charity that lets an account owner age 70½ or older move up to $111,000 in 2026 out of the IRA without any of it counting as taxable income. The transfer can satisfy some or all of your required minimum distribution for the year, and because the money never enters your adjusted gross income, it can also protect you from the ripple effects that a big taxable withdrawal would trigger, from Social Security taxation to Medicare premium surcharges.

Who Can Make One

Eligibility starts on the day you turn 70½. That threshold hasn’t moved even though the SECURE Act and SECURE 2.0 Act pushed the required minimum distribution starting age to 73 or 75 depending on birth year.¹ If you’re between 70½ and your RMD age, you can still make QCDs, and doing so shrinks the IRA balance that will drive future RMDs.

The account has to be an IRA. Traditional IRAs, rollover IRAs, and inherited IRAs all work. Inactive SEP and SIMPLE IRAs qualify as long as no employer contribution was made for the plan year ending within your tax year.² Roth IRAs technically qualify, but qualified Roth withdrawals are already tax-free, so routing them through a QCD gains nothing.

Employer plans like 401(k)s and 403(b)s cannot make QCDs. If most of your retirement money sits in a workplace plan, the common step is to roll it into a traditional IRA first and confirm the rollover has settled before requesting the charitable transfer.

For an inherited IRA, the age test applies to you as the beneficiary, not to the person who left you the account. You have to be 70½ or older yourself.

How Much You Can Give

The QCD cap started at $100,000 when Congress made the provision permanent, and SECURE 2.0 added inflation indexing beginning in 2024. For the 2026 tax year the ceiling is $111,000 per taxpayer.³ Married couples filing jointly can each make QCDs from their own IRAs, for a combined household maximum of $222,000. The rule sits in Internal Revenue Code Section 408(d)(8).²

Each spouse’s QCD has to come from that spouse’s own IRA. You can’t combine both spouses’ capacity in a single account, and unused room in one spouse’s cap doesn’t transfer to the other.

The One-Time Split-Interest Election

SECURE 2.0 also created a separate once-in-a-lifetime option to direct a QCD to a charitable gift annuity, charitable remainder annuity trust, or charitable remainder unitrust. The 2026 limit for this election is $55,000, and it counts against the overall $111,000 cap for the year.² Only the IRA owner (or the owner’s spouse, for a charitable gift annuity) can hold the income interest, and payments must begin within one year. Because you get the election just once, most people who use it save it for a single larger gift rather than splitting it.

Why the Tax Benefit Is Often Larger Than a Deduction

A QCD’s donated amount never enters your adjusted gross income at all. That’s different from withdrawing money and then claiming a charitable deduction, and the difference matters most for the majority of taxpayers who take the standard deduction.

Consider a $25,000 gift. If you pull $25,000 from your IRA and donate it, the $25,000 shows up as income; offsetting it requires itemizing on Schedule A, and itemizing only helps if your total deductions clear the standard deduction. With a QCD, the same $25,000 never appears as income. Your AGI is $25,000 lower whether you itemize or not.

A lower AGI cascades. It can shrink the taxable portion of your Social Security benefits, since up to 85% of those benefits become taxable once combined income crosses certain thresholds. It can also keep you under the income-related monthly adjustment amount brackets that raise Medicare Part B and Part D premiums. For retirees sitting near those thresholds, the avoided surcharges and bracket effects can outweigh what the equivalent charitable deduction would have delivered.

You cannot claim a charitable deduction for the same dollars you excluded through a QCD. The code doesn’t allow both benefits on the same money.²

Using a QCD to Satisfy Your RMD

QCDs count toward the year’s required minimum distribution. A $30,000 QCD covers a $30,000 RMD with no addition to taxable income.⁴ You can also send less than the full RMD as a QCD and take the rest as an ordinary taxable withdrawal.

Timing is the trap. The IRS treats the first dollars out of your IRA each year as counting toward your RMD. If you take a taxable withdrawal in January and then make a QCD in March hoping it will satisfy the RMD, the January money already filled that bucket. The QCD still lowers your taxable income for the year, but the RMD amount you meant to shield was already taxed. The fix is to make the QCD before any other IRA distribution.

The Post-70½ Contribution Offset

This one surprises people. If you made deductible IRA contributions after turning 70½, the IRS reduces the amount of your QCD that can be excluded from income. You already got a tax break going in, and the rule prevents a second one going out.

The offset works as a running ledger. Add up all deductible IRA contributions made in years you were 70½ or older, subtract any amounts that already reduced a prior year’s QCD exclusion, and the remainder cuts into this year’s excludable QCD.³ If you deducted $4,000 in contributions after 70½ and then make a $6,500 QCD, only $2,500 is excludable; the other $4,000 is taxed as a regular withdrawal. Appendix D of Publication 590-B has a worksheet that walks the math.

Which Charities Qualify

The recipient must be an organization that qualifies for tax-deductible contributions under Section 170(b)(1)(A), which in practice means an active 501(c)(3) public charity.⁵ Churches, hospitals, universities, and most familiar nonprofits fit.

Three types of otherwise-charitable recipients are excluded:

Donor-advised funds, because the money sits with an intermediary instead of going to a working charity.
Private foundations, including family foundations and other non-operating private foundations.
Supporting organizations under Section 509(a)(3), which exist to support other charities rather than run their own programs.²

The gift also has to pass the “otherwise deductible” test: you can’t receive anything of value back. A tote bag, dinner tickets, or event access in exchange for the transfer disqualifies it and turns the whole thing into taxable income. Ask the charity for written acknowledgment confirming no goods or services were provided in return.⁶ Verify the organization’s tax-exempt status through the IRS Tax Exempt Organization Search at irs.gov before you send anything; a lapsed or mismatched status reclassifies the whole distribution as a taxable withdrawal.

How to Request the Transfer

Have the following ready before you contact your IRA custodian: the charity’s full legal name, its nine-digit Employer Identification Number, the mailing address for its donations department, and your IRA account number.

Most custodians use a specific distribution request form, online or by mail, where you tell them to make the check payable directly to the charity. That payee line is the whole point. If the check is made payable to you rather than the charity, the distribution does not qualify as a QCD and the full amount becomes taxable. Some custodians mail the check to the charity themselves; others send it to you to forward. Either works, as long as the charity is the payee.

Processing typically runs five to ten business days, and year-end requests take longer. Splitting a QCD among several charities usually means a separate request for each, with the combined total staying under the $111,000 annual cap.

The December 31 Deadline

Your QCD has to be completed by December 31 of the tax year you want it to count for. There are no extensions and no grace periods. A QCD is generally treated as complete when the funds leave the IRA payable to the charity, not when the charity deposits the check, but starting a request in late December is risky: if the custodian doesn’t issue the check before the new year, the window closes.

How to Report a QCD on Your Return

Your IRA custodian issues Form 1099-R showing the full distribution in Box 1. Starting with the 2025 tax year, the IRS introduced Code Y in Box 7 to flag QCDs specifically, though custodian use of the code is optional.⁷ Either way, you are responsible for reporting the QCD correctly.

On Form 1040, enter the full distribution on line 4a. On line 4b, enter zero if the entire distribution was a QCD, or enter only the portion that wasn’t. Then check box 2 on line 4c to indicate a qualified charitable distribution is included.⁸ Older guidance told filers to write “QCD” next to line 4b; the line 4c checkbox replaced that step, though the notation doesn’t cause any harm.

Keep three records: the charity’s written acknowledgment that no goods or services were exchanged, your Form 1099-R, and the distribution request paperwork from the custodian. The IRS won’t ask unless the return is examined, but rebuilding these years later is much harder than filing them when they arrive.

State Tax Treatment May Differ

Not every state follows the federal rule. A handful do not fully conform to Section 408(d)(8) and may tax some or all of a QCD as ordinary income at the state level even though the federal side excludes it. If you live in a state with an income tax, check your state’s return instructions or call the department of revenue before assuming the federal savings carry through.

1
Internal Revenue Service. Seniors Can Reduce Their Tax Burden by Donating to Charity Through Their IRA
2
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts
3
Internal Revenue Service. Publication 590-B, Distributions From Individual Retirement Arrangements (IRAs)
4
eCFR. 26 CFR 1.408-8 – Distribution Requirements for Individual Retirement Plans
5
Internal Revenue Service. Exemption Requirements – 501(c)(3) Organizations
6
Internal Revenue Service. Substantiating Charitable Contributions
7
Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498
8
Internal Revenue Service. Instructions for Form 1040