If you don’t need your required minimum distribution (RMD) for living expenses and you care about supporting causes close to your heart, there may be a way to do both at once. A Qualified Charitable Distribution, or QCD, lets you send money directly from your IRA to charity, count it toward your RMD, and keep it out of your taxable income.
Here’s how QCDs work and what to know before you give.
What Is a QCD?
A Qualified Charitable Distribution is a direct transfer from your IRA to an eligible charity. Instead of withdrawing your RMD, paying tax on it, and then writing a check to charity, the money goes straight from your IRA custodian to the organization.
Because the funds never pass through your hands, the amount is excluded from your taxable income.
Who Can Make a QCD?
- You must be 70½ or older on the date of the distribution.
- QCDs can come from traditional IRAs, as well as inherited IRAs if you’ve reached 70½. SEP and SIMPLE IRAs can be used only if your employer isn’t making contributions to them for the year. QCDs aren’t available from 401(k)s or other employer plans.
- The 2026 limit is $111,000 per person. The limit is indexed for inflation each year. If you’re married and both spouses have their own IRAs, each spouse can give up to the limit from their own accounts.
How QCDs Work With Your RMD
- A QCD counts toward your RMD for the year, dollar for dollar.
- It’s excluded from your taxable income, which can help keep you in a lower tax bracket and may reduce how much of your Social Security is taxed or how much you pay in Medicare premiums.
- It doesn’t carry forward. If your QCD is larger than your RMD, the extra doesn’t count toward future years’ RMDs.
- You can start before RMD age. QCDs are available at 70½, even though RMDs don’t begin until 73 or 75. Giving earlier won’t satisfy an RMD, since none is due yet, but it can reduce your IRA balance and future RMDs.
Timing Matters: Do Your QCD First
Here’s a detail that catches many people off guard. The first dollars you withdraw from your IRA each year count toward your RMD. If you take your full RMD in cash early in the year and then decide to make a QCD later, the QCD can’t undo the taxable distribution you already took.
If you plan to give, it’s best to make your QCD before taking the rest of your RMD. And because charities and custodians need time to process, don’t wait until the last weeks of December.
A One-Time Option for Life Income Gifts
The SECURE 2.0 Act created a one-time opportunity to make a QCD to a split-interest entity, such as a charitable remainder trust or a charitable gift annuity, which can provide you with income while benefiting charity. For 2026, the limit for this one-time gift is $55,000, and it counts toward your annual QCD limit rather than adding to it. These arrangements have their own rules, so they’re worth reviewing carefully with your advisors.
Important Considerations
- The funds must go directly to the charity. If you withdraw the money first and then donate it, it doesn’t count as a QCD.
- Not every charity qualifies. The organization must be an eligible 501(c)(3) public charity. Donor-advised funds, private foundations, and supporting organizations don’t qualify.
- Get a written acknowledgment. Just like other charitable gifts, you’ll want a letter or receipt from the charity confirming the gift and that you received nothing in return.
- Tell your tax preparer. Your Form 1099-R will generally report the QCD as a regular distribution. You’ll need to report it as a QCD on your tax return so it’s excluded from your income.
- No double benefit. You can’t also claim a charitable deduction for the amount given through a QCD.
- Compare your options. Beginning in 2026, people who don’t itemize can deduct a limited amount of cash donations ($1,000 for single filers, $2,000 for joint filers). A QCD can still be more powerful for larger gifts, since it reduces your taxable income directly.
A Note for Self-Directed Investors
A QCD needs cash in your IRA. If your self-directed IRA holds mostly real estate or notes, you may need to build up cash from rental income or note payments first, or make your QCD from another IRA. Planning ahead makes charitable giving much easier.
How MidAtlantic IRA Can Help
Once you’ve identified the charity and confirmed its eligibility, our team can process your QCD request and send the funds directly to the organization. To allow time for processing before year end, please submit QCD requests by [DATE].
Work With Your Advisors
Whether a QCD makes sense depends on your tax situation, charitable goals, and overall retirement plan. We always recommend talking with your CPA or financial advisor before making a QCD. MidAtlantic IRA doesn’t provide tax, legal, or investment advice, but we’re happy to walk you through the process.
Thinking about giving through your IRA this year? Schedule a call with our team and we’ll help you get started.