If you’re 70½ or older and own a traditional IRA, there’s a little-known move that can lower your tax bill and satisfy your Required Minimum Distribution at the same time: the Qualified Charitable Distribution, or QCD. Instead of withdrawing money, paying tax on it, and then donating what’s left, a QCD sends funds straight from your IRA to a charity — and the amount never counts as taxable income. Here are 7 things to know about how QCDs work in 2026.

1. What Is a Qualified Charitable Distribution (QCD)

A Qualified Charitable Distribution is a direct, trustee-to-trustee transfer of funds from a traditional (or inherited) IRA straight to an eligible 501(c)(3) charity. Because the money moves directly from the IRA custodian to the charity, it’s excluded from your federal taxable income entirely.

That’s a meaningful difference from the usual approach of withdrawing IRA funds, reporting the withdrawal as income, and then claiming a charitable deduction. With a QCD, the income never shows up on your return in the first place.

2. Who Qualifies

To make a QCD, you (or the beneficiary of an inherited IRA) must be age 70½ or older at the time the distribution is made. A few other things to keep in mind:

• The distribution must come from a traditional IRA or an inherited IRA.
• QCDs are not available from an ongoing SEP or SIMPLE IRA that is still receiving employer contributions.
• The charity must be an eligible 501(c)(3) organization.

3. 2026 Dollar Limits

The QCD limit is indexed for inflation each year. For 2026:

• $111,000 is the maximum QCD amount per individual.
• Married couples with separate IRAs can each give up to $111,000, effectively doubling the household total.
• A one-time election to a split-interest entity — such as a charitable gift annuity or charitable remainder trust — is capped separately at $55,000 for 2026.

4. How a QCD Offsets Your RMD

One of the biggest advantages of a QCD is that it counts toward satisfying that year’s Required Minimum Distribution (RMD). For example, if you owe a $5,000 RMD for the year and direct $3,000 of it as a QCD to charity, only the remaining $2,000 is taxable income to you.

This makes the QCD especially useful for retirees who don’t need the full RMD amount for living expenses and would rather see it go to a cause they care about — without adding to their tax bill.

5. Rules and Restrictions to Know

A QCD has to follow a few strict procedural rules to qualify:

• The transfer must go directly from the IRA custodian to the charity — funds cannot pass through your hands first.
• QCDs cannot be directed to a donor-advised fund or most private foundations.
• The distribution must be completed by December 31 of the tax year to count for that year.
• The distribution is reported on Form 1099-R, and you’ll need to note the QCD amount when you file your return so it’s properly excluded from taxable income.

6. Why QCDs Still Matter After Recent Tax Law Changes

QCDs remain unaffected by the 2025-2026 federal tax law changes, including the One Big Beautiful Bill Act (OBBBA), unlike the itemized charitable deduction, which many retirees no longer benefit from.

That matters because a growing share of retirees now take the standard deduction instead of itemizing, which means a regular cash donation gives them no extra tax benefit. A QCD sidesteps that issue entirely: the exclusion from taxable income happens automatically, whether you itemize or not.

7. FAQ

Can I make a QCD before age 70½?
No. The IRS requires you to be age 70½ or older at the time of the distribution. Distributions made before that age don’t qualify as a QCD, even if you’re already taking regular IRA withdrawals.

Does a QCD affect Medicare IRMAA?
Because a QCD is excluded from your taxable income, it can help keep your modified adjusted gross income (MAGI) lower than it would be with a taxable withdrawal — which may help avoid crossing into a higher Medicare IRMAA surcharge bracket.

Can a QCD come from a Roth IRA?
QCD rules are built around traditional and inherited IRAs, since those are the accounts with taxable distributions and RMD requirements. Check with your IRA custodian and the current IRS guidance before assuming a Roth IRA distribution qualifies.

This article is for general informational purposes and is not tax, legal, or financial advice. QCD rules and dollar limits are indexed annually and can change with future IRS guidance. For guidance specific to your situation, consult IRS.gov or a licensed tax professional.