Using Qualified Charitable Distributions to Reduce Your Tax Burden

A qualified charitable distribution, or QCD, sends money directly from your individual retirement account (IRA) to a qualified charity, and that amount comes out of your taxable income entirely. For anyone who already takes a required minimum distribution (RMD) and gives to charity, a QCD can accomplish both in a single transfer.

The QCD rule dates to 2006, and it has specific requirements for age, account type, and timing. Here is what a distribution needs to qualify, how much you can give this way in 2026, and how to plan around the December 31 deadline.

Who Can Make a Qualified Charitable Distribution?

You have to be at least 70½ on the date of the distribution. That age requirement is separate from the age your RMDs begin, which is 73 or 75 depending on your birth year. A QCD counts for someone who is 70½ or older even if their RMDs haven’t started yet.

The distribution comes from an IRA, and a traditional IRA is where a QCD lowers your taxable income. A SEP or SIMPLE IRA generally qualifies once the employer is no longer contributing to it. A 401(k) or other workplace plan can support a QCD after the balance is rolled into an IRA.

How Much Can I Give Through a QCD?

For 2026, an individual can direct up to $111,000 to charity through QCDs. Each spouse can use their own limit if both have IRAs and both meet the age requirement, so a married couple filing jointly can double that figure between them.

The gift goes to a qualified 501(c)(3) public charity, and donor-advised funds and supporting organizations are not eligible recipients.

How Does a QCD Lower Your Tax Burden?

A standard withdrawal from a traditional IRA generally counts as taxable income the moment it lands in your account, whether you spend it or give it to charity afterward. A QCD bypasses that step because the money goes from the IRA to the charity, so it is reported as a distribution but excluded from your taxable income.

That distinction applies even if you itemize and deduct your charitable gifts. Lowering your adjusted gross income, rather than deducting from it after the fact, can affect other items tied to your income, including how much of your Social Security benefit is taxable and whether your Medicare premiums include an income-related surcharge two years later.

• The distribution is paid from the IRA to the charity, either directly by the custodian or by a check made out to the charity. Funds that pass through your own account, or a check made out to you, are treated as a regular distribution.
• A QCD can satisfy some or all of that year’s required minimum distribution, for anyone old enough to have one.
• The $111,000 individual limit for 2026 applies per person across all of your IRAs, including accounts at more than one custodian.

The December 31 Deadline

A QCD must be completed by December 31. Custodian processing can vary by payment method, and checks written through an IRA QCD checkbook generally must be cashed by year-end. Start early and confirm the distribution has posted to the IRA.

Each custodian and charity has its own processing time, and a request made in the second half of December leaves a narrow window.

Starting early gives your custodian time to issue the check, gives the charity time to receive and deposit it, and builds in a buffer for any step that takes longer than expected.

Whether a QCD fits depends on whether you itemize, how much you already give, and your broader tax picture for the year. If you’d like to talk through whether a QCD makes sense for you before the December 31 deadline, schedule a call with our team.

This content is for informational purposes only and is not individualized advice. Tax outcomes depend on an individual’s circumstances. MPM does not provide tax or legal advice. Consult your tax professional before implementing any strategy.