Qualified Charitable Distributions (2025 & 2026)

What a QCD is

A Qualified Charitable Distribution is a direct trustee-to-charity transfer from your IRA — a traditional IRA, an inherited IRA, or a SEP or SIMPLE IRA that is no longer receiving employer contributions. An ongoing SEP or SIMPLE IRA (one with an employer contribution for the plan year ending in your tax year) does not qualify, and neither does a 401(k) or 403(b); move the money to a traditional IRA first.

The check goes from your custodian to the charity — never through your bank account. The dollars count toward your year's required minimum distribution and are excluded from your adjusted gross income entirely. That second half is the point: a QCD is not a deduction, it's an exclusion.

Why the QCD beats deducting

Roughly 90% of retirees now take the standard deduction. That means a cash gift to charity produces zero federal tax benefit in 2025, and in 2026 only the small new §170(p) deduction for non-itemizers (up to $1,000, or $2,000 on a joint return, for cash gifts to public charities). A QCD sidesteps the whole itemization question: the full amount is still reported on your return (line 4a), but it is excluded from taxable IRA income and from AGI.

The bigger story is the AGI cascade. Because a QCD lowers AGI (not just taxable income), it feeds every AGI-cliff downstream:

• IRMAA on a two-year lag. Medicare Part B and Part D surcharges key off your MAGI from two years earlier — a lower AGI in 2026 can meaningfully cut your 2028 Medicare premiums. See the IRMAA guide for the bracket math.
• Social Security taxation. The 50% and 85% inclusion thresholds haven't been indexed in decades — every dollar of AGI kept off the return can shave the taxable portion of your benefits. See the Social Security Tax Calculator.
• NIIT. The 3.8% net-investment-income tax kicks in above $200,000 (single) / $250,000 (MFJ) MAGI. A QCD can drop you under the cliff.

None of these effects show up on a traditional itemized-deduction calculation. They're the reason a QCD is worth more than its face value.

2025 & 2026 QCD limits

Cap indexed under SECURE 2.0. A married couple's limits stack, but each spouse must transfer from their own IRA.

Mechanics — the six things that trip people up

1. 1. Direct trustee-to-charity. The check must be payable to the charity, not to you. If it lands in your bank account first, it's a taxable distribution plus a separate deductible gift — you lose the exclusion.
2. 2. No donor-advised funds, supporting organizations or ordinary (non-operating) private foundations. Most public charities qualify. The law excludes donor-advised funds and supporting organizations by name. An ordinary (non-operating) private foundation isn't a §170(b)(1)(A) organization, so it can't receive a QCD either — but a private operating foundation (and the rare pass-through or common-fund foundation) is one, and can. If you're not sure, ask the charity to confirm they're a §170(b)(1)(A) organization other than a supporting org or a donor-advised fund.
3. 3. Deadline is December 31. The transfer must complete — not just be initiated — by year end. Custodians can take weeks. Do this in November, not the week between Christmas and New Year's.
4. 4. First-dollars-out satisfies the RMD. Once RMDs are in play, the first distributions from the IRA in the year are treated as satisfying the RMD. Take the RMD in cash first, and any subsequent QCD no longer keeps that RMD income off your 1040 — it's already there.
5. 5. Reported on 1099-R; you claim the exclusion on the 1040. Your custodian's Form 1099-R shows the full distribution in box 1. Since 2025 it may also carry code Y to flag a QCD (optional on 2025 and 2026 forms), but many custodians still don't use it, and either way you claim the exclusion yourself. Enter the full distribution on line 4a, enter only the non-QCD part (often $0) on line 4b, and check the QCD box (box 2) on line 4c of the 2025 Form 1040. Earlier-year forms had you write "QCD" next to line 4b.
6. 6. Get the charity's written acknowledgment, and take nothing back. A QCD must be a gift you could otherwise deduct in full. Get the same written acknowledgment you would need for a deduction (for $250 or more, a contemporaneous statement that includes whether you received any goods or services; see Pub. 526, Substantiation Requirements). If you receive anything in return, such as event tickets or a dinner, the transfer fails as a QCD entirely: it becomes a taxable IRA distribution plus a separate gift.

Frequently asked questions