Qualified Charitable Distributions: Satisfying RMDs Without the Tax Problem

Most retirees who give to their church, a food bank, or a favorite cause do it with a check from their checking account. Since the standard deduction is large, many of them get no tax benefit for it at all. Meanwhile, their RMD is fully taxable.

A qualified charitable distribution, or QCD, fixes both problems at once. Done correctly, the charity gets the same dollars, and you report less income.

What the law allows

IRC 408(d)(8) excludes from gross income a qualified charitable distribution from an IRA. The requirements:

• Age. You must be at least 70 and a half on the date of the distribution. This age did not move when the RMD age moved to 73.
• Direct payment. The distribution must go directly from the IRA trustee to the charity. A check payable to the charity is fine. A distribution to you that you then donate is not a QCD.
• Eligible charity. The recipient must be a section 170(b)(1)(A) organization. Donor-advised funds and supporting organizations do not qualify, and neither do most private foundations.
• Otherwise deductible. The gift must be one that would be fully deductible as a charitable contribution, so you cannot receive goods or services in return, and you need the same written acknowledgment from the charity you would need for a deduction.
• Annual limit. For 2026, the limit is $111,000 per person, up from $108,000 for 2025, according to IRS Notice 2025-67. A married couple can each give up to the limit from their own IRAs.

SECURE 2.0 also allowed a one-time QCD to certain split-interest entities, such as a charitable remainder trust or charitable gift annuity, limited to $55,000 for 2026. That option has its own rules; get advice before using it.

How it counts toward your RMD

A QCD counts toward your required minimum distribution for the year. If your RMD is $12,000 and you send $5,000 directly to charities, you only need $7,000 more to satisfy the RMD, and only that $7,000 is taxable. See RMD ages and the required beginning date.

Timing matters. In an RMD year, the first dollars out of an IRA count toward the RMD. If you take your full RMD as cash in January and then make a QCD in December, the QCD is still excluded from income, but it does not reduce the taxable RMD you already took. Make QCDs early in the year, or at least before you finish your taxable withdrawals.

Why it beats a deduction for most retirees

A QCD is not deducted. It is excluded. That difference matters because excluded income lowers your adjusted gross income, which:

• Can reduce how much of your Social Security is taxable under IRC 86. See why retirees owe tax on Social Security.
• Can keep you under thresholds for Medicare's income-related surcharges.
• Can help preserve the senior deduction for 2025 through 2028, which phases out as modified AGI rises.
• Gives a tax benefit even if you take the standard deduction.

You cannot double dip. A QCD amount cannot also be claimed as an itemized charitable deduction.

The contribution offset rule

The SECURE Act repealed the age limit on traditional IRA contributions. To prevent people from deducting a contribution and then excluding the same money as a QCD, section 408(d)(8)(A) reduces the QCD exclusion by deductible IRA contributions made for years after you reach 70 and a half that have not already been used to reduce prior QCDs. If you are still working and contributing to a traditional IRA after 70 and a half, your QCD exclusion may be smaller than you think.

How QCDs are reported, and why notices happen

Your IRA custodian reports the QCD on Form 1099-R in box 1 as part of your gross distributions. Starting with the 2025 form, custodians may use distribution code Y to flag a QCD, alongside code 7 for a normal distribution, but the IRS made code Y optional for 2025, and many 1099-Rs will not show it.

That means the IRS's matching system may see the full amount as taxable unless your return shows otherwise. On Form 1040, you report the total IRA distribution on the gross line, report the taxable amount net of the QCD, and enter "QCD" next to the line, as the Form 1040 instructions direct. Skip that step and you may receive an underreporter notice proposing tax on money that went to charity. See Form 1099-R distribution codes.

Practical mechanics

Most custodians have a QCD request form or online process. Some offer IRA checkbooks that let you write checks directly from the IRA to a charity; the check is drawn on the IRA, so it can qualify, but the distribution generally happens when the charity cashes it, which matters for checks written in late December. Ask your custodian how it dates QCD checks, and give December gifts plenty of time to clear. Keep a simple log for each year: charity, date, amount, check number, and whether the acknowledgment letter arrived.

Common QCD mistakes

1. The check was made payable to you. Not a QCD. It is a taxable distribution followed by a personal gift.
2. The gift went to a donor-advised fund. Not eligible.
3. You received a benefit, such as event tickets or a dinner, in exchange. The gift must be fully deductible.
4. No written acknowledgment. Get the charity's letter for each gift.
5. From an ongoing SEP or SIMPLE IRA. The IRS does not treat these as eligible for QCDs while employer contributions are being made.
6. Made before age 70 and a half. The date of the distribution controls, not the year.
7. Not marked on the return. The most common cause of notices.

An example in numbers

A widow in St. Petersburg, age 77, has a $14,000 RMD and gives $6,000 a year to her church and a local food pantry. She takes the standard deduction, so writing checks from her bank account gives her no deduction. If she instead has her IRA custodian send $6,000 directly to the two charities in February, and takes the other $8,000 as a regular distribution, her taxable IRA income drops from $14,000 to $8,000. Because her income is in the range where Social Security is phasing into taxable income, the $6,000 reduction can also reduce her taxable Social Security. The charities get the same money. The illustration is simplified; your result depends on your full return.

QCDs from inherited IRAs

A beneficiary who is 70 and a half or older can make QCDs from an inherited IRA, and they can count toward any annual RMD the inherited account requires. That can be a useful way to manage the tax on an inherited account under the 10-year rule. See the inherited IRA 10-year rule.

If you received a notice about a QCD

Respond with the charity's acknowledgment letters, the custodian's records showing the check was payable to the charity, and a corrected computation showing the QCD exclusion. These notices are usually resolved on documents alone.

Next step

If you give to charity and are 70 and a half or older, ask your IRA custodian for its QCD request form. Keep every acknowledgment letter. If a QCD has already turned into an IRS notice, call (813) 229-7100. The firm's tax planning page explains how to plan charitable giving and distributions together.