Qualified Charitable Distributions: A Simple Way to Give
Charitable giving is often part of a broader legacy plan.
For retirees with traditional IRAs, a Qualified Charitable Distribution, or QCD, can be a straightforward way to support causes you care about while coordinating retirement income and taxes. Like most planning tools, it works best when the intent is clear and the mechanics are understood.
Disclaimer: For informational and educational purposes only. Charitable giving and retirement distribution rules are complex and subject to change. Consult with your tax or financial professionals before making changes.
Key Takeaways
QCDs allow IRA owners to give directly to charity without recognizing taxable income
You must be age 70½ or older, even though RMDs begin later
QCDs can satisfy all or part of your required minimum distribution
Charitable giving should be driven by purpose first, with tax benefits as a secondary consideration
What Is a Qualified Charitable Distribution
A Qualified Charitable Distribution (QCD) allows individuals age 70½ or older to transfer funds directly from an IRA to a qualified charity. When done correctly, the amount donated is excluded from taxable income. This can be especially relevant once required minimum distributions begin, currently at age 73 for most retirees under SECURE Act 2.0 rules.
Age and Account Rules
To make a Qualified Charitable Distribution, you must be at least age 70½. Eligible accounts include traditional IRAs, as well as SEP and SIMPLE IRAs that are inactive for the year of the distribution. Employer plans such as 401(k)s
do not qualify.
For 2026, QCDs are limited to $111,000 per person, up from $108,000 in 2025. Married couples with separate IRAs may each use the limit independently.
The transfer must be made directly from the IRA custodian to the qualified charity. If you take the distribution personally and then donate the funds, it does not qualify as a QCD and becomes taxable.
How QCDs Can Fit Into Tax Planning
Because QCDs are excluded from adjusted gross income, they can help manage taxable income without relying on itemized deductions. This may indirectly affect areas such as Medicare premium thresholds or the taxation of Social Security benefits.
Helpful Insight 💡: QCDs should not be used solely to avoid taxes. Giving purely for tax reasons can lead people to a smaller net portfolio than simply choosing to pay one’s tax obligation. Charitable giving tends to work best when the desire to give leads and the tax treatment is viewed as an added benefit.
Putting QCDs in Context
QCDs can be directed to multiple qualified charities and can satisfy all or part of your annual RMD. Confirm that the organization qualifies under IRS rules before initiating the transfer. Once completed, the donation is irrevocable.
Advisor Insight: Where QCDs Make the Most Sense
QCDs pair well with retirees who are already charitably inclined, take the standard deduction, and hold meaningful balances in traditional IRAs. For many retirees, not having the income show up at all can be more valuable than taking a deduction later.
They are often less helpful for those still accumulating assets, relying primarily on Roth accounts, or who prefer giving appreciated assets from taxable accounts. Understanding when QCDs are additive and when they are unnecessary helps keep charitable decisions aligned with the broader plan.
Final Thoughts
Qualified Charitable Distributions can be a clean and effective way to align charitable intent with retirement income planning. When used thoughtfully, they allow generosity to remain the priority while still recognizing the tax advantages available under current rules.
