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Qualified Charitable Distribution (QCD) Planning

If you’re 70½ or older, a QCD lets you send up to $108,000 directly from your IRA to charity — satisfying your Required Minimum Distribution and bypassing federal income tax entirely. With the 2026 inflation-adjusted cap now in effect, the window for tax-efficient giving has never been wider.

Schedule A Meeting


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The Logic-First Proof: How a QCD Delivers Better Results Than Cash Giving

Most donors over 70½ still write personal checks to charity and then try to itemize the deduction. Under today's higher standard deduction, that approach rarely moves the tax needle. A QCD skips the deduction entirely by removing the gift amount from your taxable income before it ever hits your return. To illustrate, let's assume an annual giving target of $100,000 from a donor with a $400,000 IRA RMD year.
Cash Gift + Standard Deduction
Net Federal Tax Cost on the RMD

$148,000

The full $400K RMD lands in your adjusted gross income at a 37% marginal rate. Your $100K cash donation is washed out by the standard deduction, so the charitable gift delivers effectively zero federal tax relief. AGI stays elevated, pushing up IRMAA Medicare surcharges and Social Security taxation.
With a $100K QCD
RMD Partially Satisfied, Zero Tax on Gift

$111,000

The $100K QCD counts toward your RMD and is excluded from AGI entirely. Only $300K of the RMD flows to your return, taxed at the same 37% rate. AGI drops by $100K — lowering IRMAA brackets and preserving Social Security benefits. Net savings: $37,000 in a single filing year.
Let’s assume a $400K RMD year with a $100K giving goal
Metric Cash Gift Approach QCD Approach
RMD Taken Into Income $400,000 $300,000
Charitable Gift Amount $100,000 $100,000
Deduction Actually Captured $0 N/A (pre-AGI exclusion)
Federal Tax on RMD $148,000 $111,000
Net Giving Cost $148,000 $111,000
Annual Tax Savings from QCD Strategy
$37,000
Savings = (RMD × Ratemarginal) − ((RMD − QCD) × Ratemarginal)

The Advisor Lens: QCDs for Donors 70½ and Older (2026 Update)

A QCD is the single most efficient charitable tool available to retirees with sizable IRA balances — but the execution is unforgiving. One wrong step and the entire distribution becomes taxable income. Four scenarios demand careful attention before you authorize the transfer.
⚠ THE AGE 70½ THRESHOLD

You Request the QCD Too Early

QCD eligibility begins on the exact date you turn 70½, not on January 1 of that year. Donors who trigger a QCD even a few days before the half-birthday disqualify the full distribution — it becomes ordinary income and must be deducted separately, if at all. Calendar precision is non-negotiable.
⚠ THE CHECK-HANDLING RULE

Funds Pass Through Your Personal Account

The distribution must move directly from the IRA custodian to the qualified charity. If the custodian issues a check in your name and you endorse it to the charity, the IRS treats it as a taxable withdrawal followed by a cash gift — destroying the entire QCD benefit.
⚠ THE RECIPIENT ELIGIBILITY LIMIT

Donor-Advised Funds & Private Foundations Disqualify

QCDs may only be directed to 501(c)(3) public charities. Transfers to donor-advised funds, private non-operating foundations, or supporting organizations are specifically excluded. A well-intentioned gift to a DAF converts what should be a tax-free distribution into a fully taxable RMD.
⚠ THE POST-70½ IRA CONTRIBUTION OFFSET

Deductible IRA Contributions Erase Your QCD Benefit

Under the SECURE Act, donors who make deductible IRA contributions after age 70½ must reduce their allowable QCD exclusion dollar-for-dollar. A donor continuing to earn and deduct IRA contributions can inadvertently shrink or eliminate the tax-free portion of an otherwise valid QCD.

QCD Eligibility: Complete Requirements Checklist

Not every IRA distribution qualifies as a Qualified Charitable Distribution. Both the donor and the receiving charity must meet specific conditions. Here is what needs to be true before the transfer is initiated.
QCD Qualification Review

5 / 5 Complete

Donor Age 70½ or Older
The IRA account holder must be at least 70½ years old on the date the distribution leaves the custodian. Even though RMDs now begin at age 73, QCD eligibility still starts at the traditional 70½ threshold.
Eligible Retirement Account
Only traditional IRAs, rollover IRAs, and inherited IRAs qualify. Active SEP and SIMPLE IRAs are excluded during any year contributions are still being made. 401(k), 403(b), and other employer plans do not support QCDs directly.
Direct Custodian-to-Charity Transfer
The distribution must move directly from the IRA trustee to the qualified charity. Personal receipt of the funds at any point — even briefly — disqualifies the entire distribution from QCD treatment.
Qualified Public Charity Recipient
The receiving organization must be a 501(c)(3) public charity. Donor-advised funds, private foundations, and most supporting organizations do not qualify, though a one-time $54,000 transfer to a split-interest entity is permitted under SECURE 2.0.
Within the $108,000 Annual Cap
The 2026 inflation-adjusted QCD limit is $108,000 per individual, per year. Married couples with separate IRAs may each contribute the full amount, allowing a household total of up to $216,000 in tax-free charitable giving annually.
Quick Eligibility Snapshot
Requirement Criteria
Minimum donor age 70½ on distribution date
Eligible account Traditional, Rollover, or Inherited IRA
Transfer method Custodian direct to charity only
Qualifying recipient 501(c)(3) public charity
Annual cap (2026) $108,000 per individual

Make Your Charitable Giving More Tax Efficient

If your profile meets all five conditions above, you’re positioned to reduce AGI, satisfy your RMD, and support the causes you care about — all in a single transaction. When the rules are this tight, verify before the calendar runs out.
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Expert FAQs

What is the 2026 QCD limit and how often does it change?
The 2026 QCD limit is $108,000 per eligible individual, up from $105,000 in 2025. The cap now adjusts annually for inflation under SECURE 2.0, meaning the ceiling rises modestly each year rather than staying frozen as it did for most of the program’s history.
Yes. Any amount transferred as a QCD counts toward your RMD for the year, dollar for dollar, up to the $108,000 cap. This is the core appeal of the strategy — you meet a mandatory obligation while keeping the distributed dollars completely out of your taxable income.
A QCD is a direct transfer of funds from an eligible IRA to a qualified public charity, made by an account holder aged 70½ or older. The amount transferred is excluded from the donor’s adjusted gross income, making it one of the most tax-efficient forms of charitable giving available to retirees.
Yes. The QCD limit applies per individual, not per household. Each spouse who is 70½ or older and has their own IRA may contribute up to the full $108,000 annual cap, allowing a married couple to shelter as much as $216,000 in charitable giving from federal income tax in a single year.
No. Because the QCD amount is already excluded from your AGI, you cannot also claim it as an itemized charitable deduction. Attempting to do so would be a double benefit and is specifically prohibited. The pre-AGI exclusion is generally more valuable than any deduction would be, particularly for donors who take the standard deduction.

Disclaimer: This is not tax advice, and it is recommended to consult a tax professional, as every tax situation is unique.