Qualified charitable distributions (QCDs) explained

A qualified charitable distribution, or QCD, is a way for older IRA owners to give to charity directly from an individual retirement arrangement. Instead of withdrawing money, paying tax on it and then donating, the owner has the IRA send the money straight to the charity. Done correctly, the amount never shows up in taxable income. For people who already give to charity and have reached the age for required withdrawals, it is a commonly used arrangement.

How a QCD works

IRS Publication 590-B defines a QCD as generally a nontaxable distribution made directly by the trustee of an IRA to an organization eligible to receive tax-deductible contributions. The main requirements are:

• Age. The owner must be at least age 70½ when the distribution is made. Being 70½ later in the same year is not enough; the age has to be reached by the date of the transfer.
• Account type. The distribution comes from an IRA. The publication excludes ongoing SEP and SIMPLE IRAs, meaning those still receiving employer contributions. Workplace plans such as 401(k)s do not offer QCDs.
• Direct payment. The money goes from the IRA trustee to the charity. A withdrawal paid to the owner, who then writes a personal check, is an ordinary taxable distribution followed by an ordinary donation.
• Acknowledgment. The owner needs the same kind of written acknowledgment from the charity that would be required to claim a charitable deduction.

Note that the QCD age of 70½ is lower than the age at which required minimum distributions begin, which the IRS currently lists as 73. A person can make QCDs for a few years before any withdrawal is required.

The annual limit

The amount that can be excluded from income is capped per person per year, and the cap is adjusted for inflation.

• For 2026, IRS Notice 2025-67 sets the limit at $111,000.
• For 2027, IRS Notice 2026-66 increases it to $114,000.

Publication 590-B says any QCD above the limit is included in income like any other distribution. On a joint return, each spouse has a separate limit that applies to distributions from that spouse's own IRAs.

There is also a one-time election to direct a QCD to certain split-interest arrangements, such as a charitable remainder trust or charitable gift annuity. The same notices set that separate limit at $55,000 for 2026 and $57,000 for 2027. The requirements for this election are narrow and are described in Publication 590-B.

How a QCD interacts with RMDs

Publication 590-B states that a QCD counts toward the owner's required minimum distribution. This is where much of the interest comes from. An RMD normally has to be taken and taxed whether or not the owner needs the money. Directing some or all of it to charity satisfies the requirement without adding to income.

Timing matters. If an owner takes the full RMD in cash in January and makes a QCD in November, the QCD can still be excluded from income, but the January withdrawal has already been taxed and the QCD does not undo that. People who intend to use a QCD toward the RMD often arrange it before taking other withdrawals. For how RMDs are calculated, see required minimum distributions: the basics.

Why excluding income can differ from deducting a gift

A QCD keeps the distribution out of adjusted gross income. An ordinary donation leaves income unchanged and may produce an itemized deduction. Those are not the same thing, for two reasons.

First, the IRS has noted that QCDs do not require itemizing deductions. Someone who takes the standard deduction receives no additional tax benefit from itemizing a cash gift to charity, but still benefits from a QCD's exclusion.

Second, adjusted gross income is used in other calculations, including how much of a person's Social Security is taxable and whether income-related Medicare premium adjustments apply. A lower adjusted gross income can affect those. See how different kinds of retirement income are taxed and IRMAA: how income affects Medicare premiums.

There is no double benefit. Publication 590-B says a charitable contribution deduction cannot be claimed for any QCD not included in income.

A hypothetical example

Suppose a 75-year-old has a $20,000 RMD for the year and usually gives $5,000 to charity. In one version, they withdraw $20,000, which is all included in income, and donate $5,000 from their bank account. If they take the standard deduction, the gift does not reduce their taxable income. In the other version, they direct $5,000 from the IRA to the charity as a QCD and withdraw the remaining $15,000. The RMD is satisfied either way, but only $15,000 is included in income in the second version. The figures are illustrative only.

Rules that are easy to miss

• After-tax basis. A QCD can only be made from money that would otherwise be taxable. Publication 590-B explains that if the IRA includes nondeductible contributions, the distribution is first considered to be paid out of otherwise taxable income.
• Deductible contributions after 70½. If an owner makes deductible IRA contributions for years in which they are 70½ or older, those amounts reduce how much of later QCDs can be excluded. Publication 590-B has a worksheet for this.
• Eligible recipients. The recipient has to be an organization eligible to receive tax-deductible contributions, and not every charitable vehicle qualifies, so it is worth confirming with the charity and the IRA custodian before the transfer.

Reporting

IRA custodians report distributions on Form 1099-R, and the form does not always identify a distribution as a QCD. The owner reports the full distribution on the tax return, shows the taxable amount net of the QCD, and marks it as a QCD in the way the Form 1040 instructions describe. Keeping the charity's acknowledgment letter with tax records supports the exclusion.

Because individual tax situations and state tax rules vary, a tax professional can advise on how a QCD would apply in a specific case.