A Guide to Qualified Charitable Distributions

Charitable giving is an important component of many Americans’ financial plans. If you’re wondering how to deploy your funds in a tax-efficient manner and support the causes you believe in, a Qualified Charitable Distribution (QCD) could be an option worth considering.

An eligible QCD can satisfy part or all of an applicable required minimum distribution, or RMD, rather than being a separate alternative to that requirement. The 2026 annual exclusion limit is $111,000 per eligible individual, confirmed in IRS Notice 2025-67.

Besides advancing your charitable goals, the amount distributed is excluded from your taxable income for the year (no itemized deduction is required). That can also help keep Medicare premiums and the taxation of Social Security benefits lower.

As with any tax strategy, be sure to consult with a tax professional who can help you incorporate a QCD into your larger financial plan.

Revisiting RMDs

The RMD starting age depends on birth year: generally 73, or 75 for those born in 1960 or later. That is different from QCD eligibility, which begins at age 70½. Our RMD guide explains the account and timing distinctions.

Required withdrawals from tax-deferred accounts generally create taxable income. An eligible QCD can meet part or all of that requirement while excluding the qualifying amount from income, provided the transfer follows the rules.

How a QCD Can Satisfy an RMD

If charitable giving is part of your plan and you do not need the full required withdrawal for living expenses, a QCD may help connect those goals. The money still leaves the IRA, but goes directly to the eligible charity.

A QCD lets you manage your income tax liability by sending your distribution directly to a charitable organization of your choice. Unlike a typical RMD, the amount is excluded from your taxable income, so you don't claim it as income or need to itemize to get the tax benefit.

You can make a QCD if you're at least 70½ and own an IRA. Traditional and inherited IRAs qualify, as do inactive SEP and SIMPLE plans.

Once you've chosen a qualifying charity and the size of your gift, ask your IRA custodian to arrange the transfer. If the custodian issues a check, it must be payable to the charity, not to you, whether the custodian sends it directly or gives it to you to deliver. Report the QCD on your annual tax return to claim the applicable income exclusion.

While the process is simple, making QCDs may not make sense for every investor. Here are some important rules and regulations that bear consideration.

• The donor must be at least age 70½ when the QCD is made. RMD starting ages are a separate requirement.
• The recipient must be a qualifying charitable organization, as specified by the IRS. Donor-advised funds (DAFs), private foundations, and ancillary or supporting organizations generally do not qualify.
• For it to be treated as part of an RMD, QCDs must be made by December 31 of the relevant tax year. Since these distributions only apply to the year in which they’re taken, tax benefits cannot be carried forward into future years.
• To qualify as a QCD, funds must be distributed from the IRA to the recipient. Funds distributed directly to the IRA owner and then donated to charity will not qualify.
• The annual amount that can be excluded from income as a QCD is $111,000 per eligible individual for 2026. You can make one or more qualifying gifts within that annual limit. The limit is indexed for inflation each year (it was $108,000 in 2025). If both spouses qualify and each uses their own IRA, each has a separate limit, for a combined 2026 exclusion limit of $222,000.
• The portion excluded from income as a QCD cannot also be claimed as a charitable deduction. Deductible IRA contributions made after age 70½ can affect the exclusion; IRS Publication 590-B explains the calculation.
• Coordinate the gift before taking a withdrawal you intend it to replace. A distribution already paid to you does not become a QCD simply because you later donate that cash, and a later QCD does not reverse the treatment of the earlier withdrawal. Keep the charity's acknowledgment and the records needed for tax reporting.
• A QCD can account for the entirety of an RMD or just a portion of it. In the latter case, the taxpayer must still withdraw the difference from their account as an RMD. To illustrate, if your RMD is $5,000 and you only gift $3,000 to charity, you’d still be responsible for withdrawing the remaining $2,000 and paying taxes on it.

Potential Benefits of Making QCDs

Start with the giving you already want to do. Then compare whether using IRA assets fits better than giving cash or other investments, considering your income needs and tax situation. Potential benefits include:

• Meet an Applicable RMD: Direct an eligible charitable gift from the IRA toward the year's required distribution rather than taking that portion as taxable income for personal spending.
• Give Without Itemizing: Because an eligible QCD is excluded from income rather than deducted, its tax treatment does not depend on claiming an itemized charitable deduction.

Interested in Making a QCD?

If charitable giving is already part of your plan, a QCD may help coordinate that giving with IRA withdrawals. Check the account, recipient, amount and timing with your tax professional before directing a transfer.

If you have not reached age 70½, the distribution cannot qualify as a QCD. If you want to give more than the annual exclusion limit or use a different type of asset, compare the available giving approaches rather than assuming a QCD is the best fit.

Schedule a free, no-obligation introductory meeting with Todd to discuss how charitable giving fits your broader financial plan and the coordination needed with your tax professional.

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