Allows individuals aged 70½ or older to directly transfer up to $111,000 (for 2026) per year from a traditional IRA to a qualified charity tax-free. This method bypasses income taxation on the withdrawal, helps satisfy Required Minimum Distributions (RMDs), and reduces Adjusted Gross Income (AGI), which can lower tax brackets and Medicare premiums.
Key Aspects of QCDs
- Eligibility & Age: Individuals must be 70.5 or older to make a QCD.
- Eligible Accounts: Traditional IRA, rollover IRA, inherited IRA, or inactive SEP/SIMPLE IRA.
- Direct Transfer Requirement: Funds must be transferred directly from the IRA custodian to the charity. The check must be payable to the charity, not the individual
- Tax Benefits: The amount donated is not included in your taxable income (an "above-the-line" deduction), which is advantageous even if you do not itemize deductions.
- RMD Satisfaction: A QCD can be used to fulfill all or part of your Required Minimum Distribution (RMD) for the year.
- Limits: The maximum annual limit per person is $108,000 in 2025 and $111,000 in 2026.
- Eligible Charities: Must be a 501(c)(3) organization. Donor-advised funds, private foundations, and supporting organizations are not eligible.
QCDs vs. Regular Charitable Donations
Unlike a regular donation, which is claimed as an itemized deduction, a QCD is never included in your gross income. This makes it superior for taxpayers who take the standard deduction, as it still provides a tax benefit