If you’re 70½ or older and looking for a smart way to support your favorite charities while reducing your tax bill, I’ve got good news. The qualified charitable distribution, or QCD, just got even better for 2026.
You can now transfer up to $111,000 directly from your IRA to qualified charities, and it won’t count as taxable income. This amount is indexed for inflation. If you’re married and you both have IRAs, you could give up to $222,000 combined.
Let me walk you through how this works and why it might be one of the best tax moves you can make this year.
What is a qualified charitable distribution?
A QCD is a direct transfer of funds from your traditional IRA to a qualified charity. The keyword here is “direct.” The money goes straight from your IRA custodian to the charity. It never touches your hands or your bank account.
This matters because when money flows directly to charity, it’s generally excluded from your taxable income. It’s as if that IRA withdrawal never happened from a tax perspective, unless a special reduction rule applies.
To qualify, you must be at least 70½ years old at the time of the gift. The money must come from an IRA and go directly to a qualified public charity. Donor-advised funds and supporting organizations don’t qualify for QCDs, and most private foundations don’t qualify either.
You can’t claim a charitable deduction for a QCD because the distribution is already excluded from income.
Two details that get overlooked. First, QCDs can come from traditional IRAs and inherited IRAs. SEP and SIMPLE IRAs can work too, but only for years when no employer contributions are made to the plan. Second, deductible IRA contributions you make after age 70½ can reduce the amount of a later QCD that is excludable from income.
How QCDs help with required minimum distributions
Here’s where QCDs get really interesting. If you’re subject to required minimum distributions from your traditional IRA, they generally begin at age 73. These RMDs are fully taxable as ordinary income.
A QCD can count toward satisfying your RMD for the year. So instead of taking your RMD, paying taxes on it, and then donating to charity separately, you can kill two birds with one stone. The QCD satisfies your distribution requirement while keeping that money out of your taxable income entirely.
Let’s say your 2026 RMD is $50,000. If you make a $50,000 QCD to your church, alma mater, or local food bank, you’ve met your RMD requirement. That $50,000 won’t show up as taxable income on your return.
One important note: timing matters. The deadline to make a QCD is December 31 of the tax year. There are no extensions. Make sure you give your IRA custodian enough time to process the transaction before year-end.
Why a QCD often beats an itemized charitable deduction
You might be wondering why you wouldn’t just take the RMD, donate the cash, and claim a charitable deduction. Great question. The answer comes down to the standard deduction and some new rules that took effect in 2026.
For 2026, the standard deduction is $32,200 for married couples filing jointly and $16,100 for single filers and married filing separately. Many retirees no longer itemize. If you don’t itemize, your charitable contributions don’t reduce your taxable income. A QCD can still create a tax benefit because it keeps the IRA distribution out of income in the first place.
But a QCD works differently. It’s not a deduction. It’s an exclusion from income. You don’t need to itemize. You don’t need to exceed any threshold. The entire QCD amount simply never becomes part of your taxable income in the first place.
There’s another wrinkle for 2026. In practical terms, itemizers may deduct only the portion of their total charitable contributions that exceed 0.5% of AGI, whereas QCDs bypass this floor entirely because they are excluded from income rather than claimed as itemized deductions.
A QCD also reduces your adjusted gross income, which can have cascading benefits. Lower AGI may mean lower Medicare premiums, less taxation of your Social Security benefits, and eligibility for other tax breaks that phase out at higher income levels.
The special one-time option: $55,000 to a charitable gift annuity
Here’s a lesser-known opportunity that might be perfect for someone who wants to give and also create an income stream. You can make a one-time QCD of up to $55,000 to a split-interest entity, most commonly a charitable gift annuity. For QCD purposes, the IRS allows only three types of split-interest arrangements: a charitable gift annuity or one of two types of charitable remainder trusts. This is a one-time opportunity, not something you can repeat in future years.
With a charitable gift annuity, you transfer IRA funds to a charity, and in return, the charity agrees to pay you a fixed amount for the rest of your life. It’s part gift, part income stream. The QCD portion isn’t taxed when you make the transfer, though the annuity payments you receive will be taxable as ordinary income.
This option only works in a single calendar year. You can’t spread it over multiple years or carry it forward. And it counts toward your overall $111,000 annual QCD limit. If you’re interested in this strategy, you’ll want to work closely with the charity and your financial advisor to make sure it’s set up correctly.
How to report a QCD on your tax return
Reporting a QCD correctly is crucial. Get it wrong, and you could end up paying taxes you don’t owe.
Your IRA custodian will send you a Form 1099-R showing the total amount distributed from your IRA. Starting with 2025 forms, the IRS added a new box 7 indicator, code Y, for qualified charitable distributions. For 2025 Forms 1099-R, entering code Y in box 7 is optional, so you may or may not see it. Either way, you’re still responsible for reporting the QCD properly on your tax return.
On your Form 1040, you’ll enter the total IRA distribution amount on line 4a. Then you’ll enter the taxable amount, after subtracting the QCD, on line 4b. Write “QCD” next to line 4b to explain why the numbers don’t match.
If you use tax software, there should be a question asking whether any of your IRA distribution was a qualified charitable distribution. Answer yes and enter the QCD amount. The software will handle the rest.
Don’t forget documentation. Keep the written acknowledgment from the charity confirming the date and amount of your contribution. For gifts of $250 or more, the charity must provide a statement that you received no goods or services in exchange for your donation.
Making your 2026 QCD happen
Ready to make a QCD? Here’s what you need to do.
First, contact your IRA custodian and request a direct transfer to your chosen charity. You’ll need the charity’s legal name, tax identification number, and mailing address. Some custodians have online forms specifically for QCDs. Others may require a written request.
The check must be made payable to the charity, not to you. If your custodian sends you a check to deliver to the charity, it must still be payable to the charitable organization. The moment that check is made payable to you personally, it’s no longer a QCD.
You can make multiple QCDs throughout the year to different charities. Just keep track of the total to make sure you don’t exceed the $111,000 annual limit.
The bottom line
Qualified charitable distributions are one of the best tax planning tools available to retirees who want to support the causes they care about. You get the satisfaction of making a meaningful gift, the convenience of satisfying your RMD requirement, and the tax benefit of excluding that income from your return.
With the higher standard deduction and new charitable deduction limitations for 2026, QCDs are more valuable than ever. If you’ve been taking your RMD and donating to charity separately, it’s time to reconsider your approach.
Talk to your financial advisor about whether QCDs make sense for your situation. And don’t wait until December. Give yourself plenty of time to get everything set up before year-end.