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Qualified Charitable Distributions (QCDs): How to Give to Charity from an IRA Thumbnail

Qualified Charitable Distributions (QCDs): How to Give to Charity from an IRA

Financial Planning

Qualified Charitable Distributions (QCDs):

How to Give to Charity from an IRA

What are Qualified Charitable Distributions (QCDs)?
The IRS allows taxpayers who are age 70.5 and older to make donations to qualified charities directly from their IRAs known as Qualified Charitable Distributions or QCDs. If you are 73 or older, a donation from your IRA directly to a qualified charity will count towards your RMD for that calendar year.  You may give a portion of your RMD or all of it or even more, up to $111,000 in 2026 per taxpayer. The maximum donation is adjusted for inflation annually. 

Who is Eligible for a QCD?
To be eligible for a QCD, there are criteria to be met.

  • You must be 70 plus six months old or older before you request a distribution.
  • Donations must be made directly from the IRA to a qualified charity. The money cannot pass through your checkbook.
  • The charity must qualify as a 501(c)(3) charity under IRS rules.
  • Donor Advised Funds (DAF) are generally not eligible.
  • Any donations that result in a benefit to the donor such as event tickets, meals or merchandise do not qualify.
  • Employer sponsored plans such as 401(k)s, 403(b)s, SEP and SIMPLE IRAs do not qualify.  

If you already give to your church or your school or other qualified charity and you are 70,5 or older, this can be a very valuable tax strategy for you.

What are the Tax Benefits of Donating to Charity from your IRA?
Over 80% of Virginia taxpayers no longer itemize their deductions. The Tax Cuts and Jobs Act 2017 dramatically raised the standard deduction for federal taxpayers. Virginia law generally requires taxpayers to use the same filing method on state returns as they do on federal returns. Before this sweeping tax change, approximately 38% of Virginia taxpayers itemized deductions.  As a result of the increased standard deduction only 15% to 20% itemize today.  

This change to claiming a standard deduction has caused charitable giving to decline nationally. When taxpayers take the standard deduction, they lose the opportunity to deduct charitable donations. Losing this tax incentive has discouraged some givers.

The QCD allows taxpayers who are 70.5 and older and own an IRA to claim the Standard Deduction and still receive a tax benefit from charitable giving by donating to a qualified charity directly from their IRA. 

New in 2026 the IRS has authorized a $1,000 above the line deduction for individual taxpayers who claim the standard deduction ($2,000 for married filing a joint tax return) for cash gifts to a qualified charity of your choice. This does not apply to gifts in-kind or contributions to donor advised funds (DAF).     

Is there a Tax Benefit to QCDs if I Itemize Deductions?
Even if you itemize deductions, there are benefits to giving directly from your IRA to charity when you are eligible.  Here’s how it works: If you receive an IRA distribution into your checkbook and then you write a check to charity, the tax liability on the IRA distribution is reported to you. You must add it to your Adjusted Gross Income (AGI) and then claim a deduction on Schedule A of your income tax return.   Ultimately you can receive a tax deduction, but increasing your Adjusted Gross Income is problematic for high income taxpayers. Several additional taxes for high income earners are linked to your Adjusted Gross Income. You need to keep your AGI as low as possible.

For example, the Net Investment Income Tax (NIIT) can add 3.8% tax to interest, dividends, capital gains, rental and royalty income and passive business income for individual taxpayers with an AGI exceeding $200,000 and married taxpayers filing jointly with an AGI exceeding $250,000.  In addition, there are phase outs or elimination of some tax deductions based on the level of AGI.  Those include the Enhanced Senior Deduction and the waiver of tax on overtime pay. The state and local tax deduction (SALT) is reduced based on Adjusted Gross income.  

Medicare Premiums are based on Adjusted Gross Income for high earners.  Keeping your AGI under the IRMAA limits can save thousands of dollars in premium payments.  

Because QCDs are donated directly from your IRA, they do not add to your AGI, helping you to stay under the threshold for additional high-AGI related taxes. 

New for Itemizers in 2026, there is no tax deduction on the first dollars you give to charity up to 0.5% of your Adjusted Gross Income.  For example, if your AGI is $200,000 you are not allowed to deduct the first $1,000 you give to charity.  There is no limitation like that under QCD rules.

Qualified Charitable Distributions offer tax benefits to both those who claim the standard deduction and for itemizers.  Charitable giving strategies can pay off when you take the time to plan.   

How do I Make Qualified Charitable Donations (QCDs) from my IRA?
Instead of writing a check from your checkbook, you must instruct the custodian of your IRA to make a check payable to the qualified charity of your choice directly from your IRA account. 

An important step in this process is proper reporting on your annual tax return.   The IRS is working on a code to alert tax preparers and the IRS of QCDs, but currently Form 1099 will not reflect how much of the IRA distribution was given directly to charity.  This is the responsibility of the taxpayer and the tax preparer. Form 1099 reports the total withdrawals from the IRA.  The breakdown between QCDs and regular distributions must be done on the income tax return.  This is an important final step because if it is not reported properly the taxpayer does not receive the tax benefits.   

Most IRA custodians will help facilitate this, but a financial advisor committed to client service can make this very easy for you.  At Guelich Capital we work hard to make QCDs hassle-free for our eligible clients each year. We set up the giving for our clients in the custodian’s portal and make sure to send a reminder letter each January to assist our clients in reporting their QCD giving to their tax preparers.  

Call us to speak with an advisor if you have questions about your Required Minimum Distribution or giving to your favorite charity through IRA distributions.  We are here to help. 540-772-4545 or info@guelichcapital.com

To learn more about Qualified Charitable Distributions, click here.

This article is for educational purposes only.  It should not be considered tax, investment or legal advice.  Consult a qualified professional regarding your own specific situation.  

Written by Connie C. Guelich, CFP® this article represents our views at the time written, and it is subject to change.