RMDs · 11 min read
Qualified Charitable Distributions in 2026: How Up to $111,000 Can Satisfy an RMD Without Adding to Income
A qualified charitable distribution sends money directly from an IRA to an eligible charity. It counts toward that year’s required minimum distribution but is excluded from taxable income, up to $111,000 per person in 2026, or $222,000 for a couple who each own IRAs. The owner must be at least 70½ on the date of the transfer.
Once required minimum distributions begin, money has to leave a traditional IRA every year, and each dollar that leaves normally becomes taxable income. For households that already give to charity, one provision changes where those dollars land. A qualified charitable distribution, or QCD, lets the IRA pay the charity directly, satisfies some or all of the year’s RMD, and keeps the gift out of adjusted gross income. No other mechanism does all three.
What follows is educational. The treatment of a specific distribution should be confirmed with a tax professional and with the IRA custodian.
What the QCD Question Is Really Asking
For a household that has already decided to give, the QCD question is not whether to give or how much. It is which pocket the gift comes from and which line of the tax return it touches. The same $20,000 gift can arrive at a charity in two ways:
- Withdraw, then give. The IRA pays the owner, the distribution is added to AGI, and the owner writes a check. Any offsetting deduction depends on itemizing or, from 2026, on a small deduction for non-itemizers.
- Give from the IRA. The custodian pays the charity, the distribution counts toward the RMD, and it never enters AGI.
The charity receives the same amount either way. The household’s tax return does not look the same.
The Rules, Requirement by Requirement
A QCD has to meet each of the following. (IRS Publication 590-B; 26 U.S.C. §408(d)(8); IRS Notice 2025-67)
| Requirement | The rule | Where it usually goes wrong |
|---|---|---|
| Age | The IRA owner is at least 70½ on the date of the distribution | Assuming the RMD age applies; QCDs start earlier |
| Account | An IRA; not a 401(k) or 403(b), and not an ongoing SEP or SIMPLE IRA | Requesting a QCD from a workplace plan |
| Route | Paid directly by the IRA trustee to the charity | A check payable to the owner, even if it is passed straight to the charity |
| Recipient | A public charity; donor-advised funds and supporting organizations are excluded, and most private foundations do not qualify | Directing the gift to a donor-advised fund |
| Annual limit | $111,000 per person in 2026, up from $108,000 in 2025 and indexed for inflation; a spouse with an IRA has a separate limit, so $222,000 for a couple | Exceeding the limit; the excess is an ordinary taxable distribution |
| Timing | Completed by December 31 to count toward that year’s RMD | Late-December requests that clear in January |
| Paperwork | The same written acknowledgment from the charity that a deductible gift would need | No acknowledgment on file |
Because QCD eligibility begins at 70½ and RMDs begin at 73 for those born 1951 through 1959 and at 75 for those born in 1960 or later, there are at least two and a half years in which QCDs are available before any RMD is due. Gifts made in those years still leave AGI untouched; they simply do not yet satisfy a requirement.
Four details worth knowing
- A one-time split-interest gift. An owner may elect, once, to make up to $55,000 in 2026 of QCDs to fund a charitable remainder trust or a charitable gift annuity. (IRS Notice 2025-67; IRS Publication 590-B)
- Contributions after 70½ reduce the exclusion. Deductible IRA contributions made for years in which the owner was 70½ or older reduce the amount of later QCDs that can be excluded. (IRS Publication 590-B)
- Only taxable dollars qualify. If an IRA holds nondeductible contributions, a QCD is treated as coming first from the portion that would otherwise be taxable. (IRS Publication 590-B)
- No double benefit. An excluded QCD cannot also be claimed as a charitable deduction. (26 U.S.C. §408(d)(8))
$111,000 per IRA owner in 2026, or $222,000 for a couple who each have IRAs, paid custodian to charity and excluded from adjusted gross income.
The Arithmetic: One Gift, Two Tax Results
Take a 75-year-old with a $500,000 traditional IRA on the prior December 31. The Uniform Lifetime Table factor at 75 is 24.6, so the 2026 RMD is $500,000 ÷ 24.6 = $20,325. (IRS Publication 590-B) Suppose the owner, who files jointly and is in the 22 percent bracket, wants to give exactly that amount.
| Path | RMD met? | Added to AGI | Deduction available (standard-deduction filer) | Federal tax at 22% |
|---|---|---|---|---|
| Withdraw, then give by check | Yes | $20,325 | Up to $2,000 for cash gifts, joint filers, from 2026 | ($20,325 − $2,000) × 22% = $4,031.50 |
| QCD, custodian pays the charity | Yes | $0 | None needed | $0 |
Two 2026 figures frame the comparison. The standard deduction for joint filers is $32,200, before the additional amount of $1,650 for each spouse 65 or older. (IRS Rev. Proc. 2025-32) Most retired couples take it, which means a charitable deduction on Schedule A does not help them. Beginning in 2026, non-itemizers may deduct up to $1,000 of cash gifts to eligible charities, or $2,000 on a joint return; gifts to donor-advised funds and supporting organizations do not qualify. (IRS, Working Families Tax Cuts provisions) That narrows the gap between the two paths but does not close it: on these facts, the QCD saves $4,031.50 in federal income tax, compared with $20,325 × 22% = $4,472 before the new deduction.
Why Keeping It Out of AGI Matters Beyond the Tax Bill
Adjusted gross income feeds several other retirement formulas, so a distribution that never reaches AGI has effects beyond its own tax.
- Medicare premiums. 2026 IRMAA surcharges on Parts B and D begin above $109,000 of modified AGI for single filers and $218,000 for joint filers, and each threshold is a cliff, triggered by a single dollar. A QCD stays out of that measure; the same distribution taken as income does not. (CMS, 2026 fact sheet)
- Taxation of Social Security. Up to 85 percent of benefits can be taxable, depending on income measured against base amounts of $25,000 (single) and $32,000 (joint) that are not indexed for inflation and have not changed since benefits first became taxable in 1984. (26 U.S.C. §86) For households below the point where the 85 percent maximum applies, a lower AGI can mean a smaller taxable share.
- The senior deduction. For 2025 through 2028, taxpayers 65 and older may claim an additional $6,000 deduction that phases out above $75,000 of modified AGI, or $150,000 for joint filers. (IRS, deductions for seniors) Lower AGI keeps more of it.
- Future RMDs. Dollars given through a QCD leave the IRA, reducing the balance on which each later year’s RMD is calculated.
Timing and Reporting
Order within the year matters. The first dollars distributed from an IRA in a year count toward that year’s RMD, so an owner who takes the full RMD as cash in March cannot later relabel it as a QCD. A household that plans to give should schedule the QCD before, or alongside, other withdrawals. When one spouse’s RMD is the concern, the QCD should come from that spouse’s IRA, because an RMD can be satisfied only from the owner’s own IRAs.
Form 1099-R now has a code, Y in box 7, to identify a QCD, but custodians were not required to use it for 2025, so the form may show what looks like an ordinary distribution. (IRS, code Y on Form 1099-R) The exclusion is claimed on the tax return: the gross distribution is reported with the taxable amount reduced accordingly, and the 2025 Form 1040 added a checkbox on line 4c to identify a QCD. (IRS Publication 590-B) Keeping the charity’s acknowledgment with the return records completes the file.
A Hypothetical Household, Worked Through
This illustration is hypothetical and simplified. It is not based on any client and is not a recommendation. It uses 2026 figures and ignores state taxes and the senior deduction phase-out, which would add to the difference shown.
A married couple files jointly. One spouse is 75, with a traditional IRA worth $800,000 on December 31, 2025; the 2026 RMD is $800,000 ÷ 24.6 = $32,520. The other spouse is 72, born in 1954, with an IRA of $300,000 and no RMD until the year that spouse turns 73. They give $24,000 a year to their congregation and a food bank, historically by check.
Their 2026 income: $62,000 of Social Security, of which 85 percent ($52,700) is taxable at this income level; a $95,000 pension; $20,000 of taxable interest and dividends; the $32,520 RMD; and an extra $20,000 from the older spouse’s IRA toward a car. Even counting the gifts, their itemized deductions of about $32,000 fall short of their $35,500 standard deduction ($32,200 + 2 × $1,650).
| Gifts by check | Gifts as a $24,000 QCD | |
|---|---|---|
| Adjusted gross income | $52,700 + $95,000 + $20,000 + $32,520 + $20,000 = $220,220 | $220,220 − $24,000 = $196,220 |
| Deductions | $35,500 + $2,000 non-itemizer gift deduction = $37,500 | $35,500 |
| Taxable income | $182,720 | $160,720 |
| Federal tax on the difference (22% bracket) | $22,000 × 22% = $4,840 lower with the QCD | |
| Medicare tier two years later (2026 thresholds) | Above $218,000: first IRMAA tier | Standard premium, $21,780 below the threshold |
| Added Medicare premiums for the couple, at 2026 rates | ($81.20 + $14.50) × 2 × 12 = $2,296.80 | $0 |
Both taxable incomes sit inside the 22 percent bracket, which for joint filers in 2026 runs from $100,800 to $211,400. (IRS Rev. Proc. 2025-32) The QCD comes from the older spouse’s IRA so that it counts toward that spouse’s $32,520 RMD, leaving $8,520 still to be distributed by December 31. A QCD from the younger spouse’s IRA would be just as valid as a gift, but it would not reduce the older spouse’s requirement.
Put together, the same $24,000 of giving costs this household $4,840 less in 2026 federal income tax and, on 2026 thresholds, keeps $2,296.80 of Medicare surcharges off their 2028 premiums.
Same charities, same $24,000. Routed through the IRA, the gift lowers federal tax by $4,840 and moves the couple from the first IRMAA tier to the standard premium.
How We Approach This in a Plan
For charitable households, we plan giving and distributions together each year rather than treating the gift as a year-end afterthought.
- RMD scheduling. We calculate each spouse’s requirement early in the year and place the QCD first. The calculation and account rules are in our RMD guide, and the consequences of a shortfall in the missed RMD penalty.
- Medicare. We measure projected MAGI against the IRMAA tiers two years out; the thresholds are covered in the IRMAA cliff.
- Withdrawal order. Which account funds spending and which funds giving is part of the broader sequence described in the order in which you draw down accounts.
- Giving vehicles. Gifts of appreciated stock, donor-advised funds and QCDs each have a place; we compare them against the household’s deduction position each year. The senior deduction’s interaction is covered in the $6,000 senior deduction.
- Estate. Charitable intentions at death can be met by naming charities as IRA beneficiaries, which pairs naturally with lifetime QCDs; we coordinate those designations with the estate plan.
Questions Worth Answering Before You Decide
- Is each spouse at least 70½ on the planned transfer date?
- Which spouse’s RMD should the QCD satisfy, and does that spouse’s IRA hold enough?
- Are the intended recipients public charities, rather than donor-advised funds or supporting organizations?
- Has any RMD already been taken as cash this year?
- Will the household itemize, and does the new non-itemizer deduction change the comparison?
- How close is projected MAGI to an IRMAA threshold or the senior deduction phase-out?
- Will the custodian complete the transfer by December 31, and will the charity send an acknowledgment?
What This Does Not Mean
- It does not mean the gift is free. The money leaves the household. A QCD lowers the cost of giving that was already intended; it is not a way to keep the funds and avoid tax.
- It does not stack. A QCD cannot also be deducted, and amounts above the annual limit are ordinary taxable distributions.
- It does not apply to workplace plans. A 401(k) balance has no QCD path unless it is first rolled to an IRA, a separate decision with its own trade-offs.
- It is not personalized advice. Reporting and eligibility should be confirmed with a tax professional and the custodian.
Frequently Asked Questions
Q: What is the QCD limit for 2026?
$111,000 per IRA owner, up from $108,000 in 2025. A married couple who each own IRAs can exclude up to $222,000. The limit is adjusted for inflation each year.
Q: At what age can I make a qualified charitable distribution?
At 70½ or older on the date of the distribution. That is earlier than the RMD starting age of 73 or 75, so QCDs are available for at least two and a half years before any RMD is due.
Q: Can a QCD go to a donor-advised fund?
No. Donor-advised funds and supporting organizations are excluded, and most private foundations do not qualify. The recipient must be an eligible public charity.
Q: How is a QCD better than withdrawing the money and deducting the gift?
A withdrawal adds to adjusted gross income even if the money is given away, and the deduction helps only itemizers, plus up to $1,000, or $2,000 joint, for non-itemizers from 2026. A QCD never enters AGI, which also keeps it out of the Medicare IRMAA and Social Security taxation calculations.
Q: What disqualifies a distribution from QCD treatment?
A check payable to the owner, a gift from a 401(k) or an ongoing SEP or SIMPLE IRA, an ineligible recipient, or an owner under 70½. To count toward a year’s RMD, the transfer must also be completed by December 31.
Q: How is a QCD reported on the tax return?
Form 1099-R may flag it with code Y in box 7, though that code was optional for 2025. The owner reports the gross amount, excludes the QCD from the taxable amount, and on the 2025 Form 1040 checks the QCD box on line 4c.
Bring the decision in front of you.
The first conversation is 30 minutes. A recent statement helps; no preparation is needed.
Sources and further reading
- IRS Publication 590-B
- IRS Notice 2025-67 (2026 QCD and split-interest limits)
- 26 U.S.C. §408(d)(8)
- IRS Rev. Proc. 2025-32 (2026 standard deduction and brackets)
- IRS, charitable deduction for non-itemizers
- IRS, senior deduction
- CMS, 2026 fact sheet
- 26 U.S.C. §86
- IRS, code Y in 2025 Form 1099-R box 7 is optional
Next steps
Keep reading
Get new guides by email.
An occasional email when we publish a new guide: the short answer, and what it may mean for your portfolio and your plan.
The views and opinions expressed here are those of The Financial Sciences Company as of the publish date and are provided for informational and educational purposes only. They are not personalized investment, tax, or legal advice. The Financial Sciences Company, LLC is a registered investment adviser. Registration does not imply a certain level of skill or training. Additional information is available in our Form ADV at adviserinfo.sec.gov.
General educational information, current as of 2026. Figures and rules change. For guidance specific to your situation, speak with a qualified professional.