Qualified Charitable Distributions From IRAs After 70½

Once required minimum distributions begin, many retirees find themselves taking money out of an IRA they do not need, paying tax on it, and then writing checks to charity from what is left. If you no longer itemize, the gift produces no deduction at all. Qualified charitable distributions fix that mismatch by sending the money straight from the IRA to the charity and leaving it off your tax return altogether.

The rule has been permanent since 2015, and recent legislation indexed the annual limit to inflation and added a one-time option for gifts to certain trusts and annuities. For a retiree with a large IRA, charitable habits, and income near a Medicare or Social Security threshold, the QCD is often the most efficient way to give. This guide covers the eligibility rules, how QCDs interact with RMDs, the reporting, and the planning decisions around them. It is educational, not individualized advice.

What Qualified Charitable Distributions Are and Who Can Make Them

A qualified charitable distribution is a distribution from an IRA paid directly by the custodian to an eligible charity. The amount is excluded from your gross income. You do not get a charitable deduction, because you were never taxed on the money in the first place, and that exclusion is more valuable than a deduction for nearly everyone.

You must be 70 and a half or older on the date of the distribution. This is a true half-birthday test, not a year-you-turn test. Someone born in March is eligible in September of the year they turn 70, not in January. The age has not changed even though the required minimum distribution age moved to 73 and will move to 75 for people born in 1960 or later, so there is a window of several years in which you can make QCDs before RMDs begin.

The annual limit is $100,000 indexed for inflation since 2024. For 2026 the limit is $111,000 per person. A married couple where each spouse owns an IRA can give up to twice that, but the limit is per person, not per couple, and one spouse cannot use the other's unused amount. Confirm the current figure in IRS Publication 590-B, which covers IRA distributions.

Which accounts and which charities qualify

QCDs can come from a traditional IRA, a rollover IRA, an inherited IRA if the beneficiary is 70 and a half, and a SEP or SIMPLE IRA that is no longer receiving employer contributions. They cannot come from a 401(k), 403(b), or other workplace plan. Retirees who want to make QCDs from plan money typically roll it to an IRA first. Roth IRAs are technically eligible but there is no reason to use them, since Roth withdrawals are already tax-free.

The receiving charity must be a public charity eligible to receive deductible contributions. Donor-advised funds, supporting organizations, and private non-operating foundations are excluded. Churches, universities, hospitals, food banks, and community organizations all qualify. You may not receive any benefit in return, so a QCD cannot buy gala tickets or pay for a membership with real perks.

How QCDs Satisfy Required Minimum Distributions

Once RMDs begin, a QCD counts toward that year's required amount. If your RMD is $60,000 and you make a $25,000 QCD, you need to withdraw only $35,000 more in taxable distributions. If you make a $60,000 QCD, your RMD is fully satisfied and none of it hits your return.

The sequencing rule surprises people. The IRS treats the first dollars out of your IRA each year as your RMD. If you take your full RMD in cash in January and make a QCD in November, the QCD is still excluded from income, but it does not reduce the RMD you already took. To get both benefits, make the QCD before you take any other distribution, or at least before you have taken the full RMD. The IRS explains the RMD rules on its required minimum distributions page.

QCDs can exceed your RMD up to the annual limit. A retiree with a $40,000 RMD and strong charitable intentions can give $100,000 through QCDs, satisfy the RMD, and reduce the IRA balance that will drive future RMDs. That is a meaningful lever for people whose IRAs have grown larger than they will ever spend.

Coordinating with other withdrawals

A QCD sits inside a broader withdrawal plan. In years when you are also doing Roth conversions or drawing from taxable accounts, the order and amount of each move affect your bracket. Our guide to the retirement income withdrawal order explains how the pieces fit, and a QCD usually comes first in the sequence because it removes income rather than shifting it.

Why a QCD Beats Taking the Money and Giving It

The difference between an exclusion and a deduction shows up in several places at once.

• You keep the full standard deduction. Most retirees do not itemize, so a cash gift after taking an RMD produces no tax benefit. A QCD works whether or not you itemize.
• Your adjusted gross income is lower. That affects the taxable share of Social Security benefits, which is computed from AGI plus half of benefits.
• Medicare premium surcharges, known as IRMAA, are based on modified AGI from two years earlier. Keeping $20,000 or $30,000 of RMD income off the return can drop you a tier and save a couple thousand dollars per year for a married couple. Details are on the Social Security Medicare premiums page.
• The 3.8 percent net investment income tax uses AGI to determine whether you are over the threshold. A lower AGI can shield some investment income from it.
• The 2026 floor of 0.5 percent of AGI on itemized charitable deductions does not apply to QCDs, because they are not deductions.
• Georgia starts from federal adjusted gross income, so an excluded QCD is excluded from state tax as well.

The One-Time QCD to a Charitable Gift Annuity or Trust

Since 2023, IRA owners can make a single lifetime QCD, capped at a separate indexed limit that is $55,000 for 2026, to fund a charitable gift annuity, a charitable remainder unitrust, or a charitable remainder annuity trust. The gift counts against the regular annual QCD limit for that year.

The option is narrow. The annuity or trust must pay at least 5 percent per year, all payments are taxed as ordinary income, only you and your spouse can be income beneficiaries, and the arrangement must be funded entirely by the QCD. It is most attractive for a retiree who wants a modest lifetime income stream from a charity they already support and who has more IRA money than they need. For larger charitable trusts funded with appreciated assets, other structures are usually better, and they require an estate planning attorney to draft.

How to Make and Report a QCD

Contact your IRA custodian and request a distribution payable to the charity. Most custodians will mail the check directly to the charity or to you for forwarding, as long as the check is made out to the charity. Some IRAs come with a checkbook, and a check you write to a charity from that account qualifies, but the charity must cash it before December 31 for it to count for that year. Allow several weeks in December.

Ask the charity for a written acknowledgment stating the amount and confirming that no goods or services were provided. The IRS requires it for any gift of $250 or more, and the QCD exclusion depends on it.

Your custodian will issue Form 1099-R showing the full distribution as if it were taxable, because custodians do not track QCDs. On your Form 1040, report the total distribution on line 4a, the taxable portion excluding the QCD on line 4b, and write the letters QCD next to line 4b. Tax software has a field for it. If you or your preparer miss this step, you will pay tax on money you gave away, which is the most common QCD error we see. Keep the acknowledgment letters with your return.

The deductible contribution offset

Since 2020, people over 70 and a half can make deductible traditional IRA contributions if they have earned income. Any such contribution reduces the amount of future QCDs that can be excluded, dollar for dollar, on a cumulative basis. A retiree still working part time who wants to make QCDs should generally skip deductible IRA contributions and use a Roth IRA or workplace plan instead.

QCDs Versus Giving Appreciated Stock

Retirees with both a large IRA and a taxable account with appreciated stock have two efficient giving tools. A QCD removes ordinary income that would have been taxed at your full marginal rate. A gift of appreciated stock avoids capital gains tax and produces a deduction only if you itemize.

As a rule, use QCDs first up to the amount of your RMD, because RMD income is taxed at ordinary rates and inflates AGI. If your giving exceeds your RMD and you itemize, appreciated stock is the next best gift, especially for positions with very low basis. If you do not itemize, continue with QCDs up to the limit. Our overview of charitable giving tax strategies compares these tools in more depth.

One more consideration is the estate. IRA balances left to children are taxed as ordinary income under the ten-year rule, while appreciated stock receives a step-up in basis at death. That argues for giving from the IRA during life and leaving the stock to heirs, which is exactly what a QCD does.

Common Mistakes With Qualified Charitable Distributions

The rules are not complicated, but the details trip people up.

• Making the distribution before reaching 70 and a half, even by a few weeks. The transfer is then a taxable distribution.
• Taking the full RMD in cash early in the year and then trying to make a QCD count against it.
• Sending the QCD to a donor-advised fund, which disqualifies it.
• Having the custodian issue the check in your name and depositing it before writing your own check to the charity, which breaks the direct-transfer requirement.
• Forgetting to mark the distribution as a QCD on the tax return and paying tax on it.
• Writing an IRA checkbook check in late December that the charity does not cash until January.
• Making deductible IRA contributions after 70 and a half, which reduces the QCD exclusion.

For a charitably inclined retiree with a traditional IRA, the qualified charitable distribution is usually the first tool to reach for. It removes income rather than deducting it, it satisfies the RMD, and it quietly improves the numbers that drive Medicare premiums and Social Security taxation. The mechanics take a little care, especially around timing and reporting, but once the routine is set it repeats every year with little effort. Our tax planning service builds QCD timing into the annual withdrawal plan for clients in and near retirement.

Tony Colunga · Founder, Attend Wealth

Tony leads Attend Wealth, a fee-based wealth management firm in Atlanta serving professionals, families, physicians, and business owners. Advisory services are held to a fiduciary standard. More about Attend