Every December, a familiar question lands in a lot of inboxes: you've already written checks to your church, your alma mater, or a cause you care about, so why doesn't any of it show up as a deduction? For retirees taking the standard deduction — which is most of them, since the 2017 tax law nearly doubled it — charitable gifts from a checking or brokerage account produce no tax benefit at all. The gift helps the charity. The return looks exactly the same as if you'd given nothing.
There's a narrower mechanism that changes that math for anyone with a traditional IRA: the qualified charitable distribution, or QCD. It lets you send money directly from your IRA to a qualifying charity, and that amount is excluded from your taxable income — no itemizing needed, no deduction to calculate. It's one of the few strategies in the tax code that helps you whether you itemize or not.
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Who Can Use One
You have to be at least 70½ years old on the date of the distribution. That's worth noting because it's a different threshold than the age at which Required Minimum Distributions currently begin — 73, under SECURE 2.0. So there's a window, roughly ages 70½ to 73, where you could use QCDs even before RMDs are mandatory, which can be useful if you're trying to draw down a large IRA balance before it grows further.
The transfer has to move directly from the IRA custodian to the charity — you can't take the distribution yourself and then write a check. And the recipient has to be a qualifying 501(c)(3) public charity. Donor-advised funds, private foundations, and supporting organizations generally don't qualify, so a QCD isn't a substitute for those vehicles if you're already using one.
What the Limits Look Like for 2026
The annual QCD limit is indexed for inflation each year. For 2026, an individual can direct up to $111,000 from an IRA to charity through QCDs, up from $108,000 in 2025. A married couple where both spouses have IRAs and both make QCDs could direct up to $222,000 combined.
SECURE 2.0 also created a one-time option: up to $55,000 (the 2026 indexed figure) can be used for a single QCD into a charitable remainder annuity trust, a charitable remainder unitrust, or a charitable gift annuity. That amount counts against your regular annual QCD cap for the year you use it, so it isn't an additional allowance — it's a way to route part of your existing limit into a vehicle that also pays you income for life.
Why It Can Outperform a Regular Deduction
A QCD counts toward satisfying your RMD for the year, but because the money never lands in your adjusted gross income, it can affect more than your federal tax bracket. A lower AGI can help keep you below the income thresholds that trigger IRMAA surcharges on Medicare Part B and D premiums, and it can reduce the portion of Social Security benefits subject to tax. These are the kinds of ripple effects that are worth mapping out with an advisor or tax preparer before year-end, since the benefit depends heavily on where your income already sits.
A Hypothetical Example
Consider a hypothetical couple, Dan and Patricia Ellison, both 74, with a combined $22,000 RMD due this year and a habit of giving about $10,000 annually to a local food bank and their college's scholarship fund. If they write checks from their brokerage account, they get no deduction because they take the standard deduction. If instead Patricia directs $10,000 of her RMD straight to those two charities as a QCD, that portion of her RMD is satisfied and excluded from income — lowering their AGI by $10,000 compared to taking the full RMD in cash and donating separately.
Questions Worth Raising With Your Advisor
- Does your current IRA custodian support direct QCD transfers, and what's the paperwork timeline before year-end?
- If you're between 70½ and 73, would starting QCDs now help manage a large IRA balance before RMDs begin?
- Would routing part of a QCD into a charitable remainder trust or gift annuity make sense given your income needs?
- How would a QCD affect your Medicare premium bracket or the taxability of your Social Security benefit this year?
Could a QCD Fit Into How You Give?
If charitable giving is already part of your financial picture, the question isn't whether to give — it's whether you're giving in the most tax-efficient way available to you. A QCD won't make sense for everyone, particularly those who aren't yet 70½ or who give to organizations that don't qualify. But for the right IRA owner, it's a rare case where a tax rule and a personal value point in the same direction.
Schedule a complimentary consultation with Ben Loughery.
Ben Loughery is a CERTIFIED FINANCIAL PLANNER® and founder of Lock Wealth Management, based in Atlanta, GA. He specializes in retirement income planning, tax optimization, and helping clients build financial confidence at every stage of life.
Frequently asked questions
- What is a qualified charitable distribution (QCD)?
- A QCD is a direct transfer from a traditional IRA to a qualifying 501(c)(3) charity. The amount is excluded from taxable income and can count toward your required minimum distribution.
- Who is eligible to make a QCD?
- You must be at least 70½ years old on the date of the distribution. The charity must be a qualifying public charity; donor-advised funds, private foundations, and supporting organizations generally do not qualify.
- What is the QCD limit for 2026?
- For 2026, an individual can direct up to $111,000 from an IRA to charity through QCDs, up from $108,000 in 2025. A married couple with two IRAs could direct up to $222,000 combined.
- Can a QCD satisfy my required minimum distribution?
- Yes. A QCD can count toward your RMD for the year, which is one of the reasons it is especially useful for retirees who already have to withdraw the money anyway.
- Why might a QCD be better than taking a charitable deduction?
- Most retirees take the standard deduction, so charitable checks from a brokerage or bank account produce no tax benefit. A QCD lowers adjusted gross income directly, which can also reduce Medicare premium surcharges and the taxable portion of Social Security benefits.
