The IRS raised the annual limit on qualified charitable distributions from $108,000 to $111,000 for 2026.
A qualified charitable distribution, or QCD, sends money from an IRA straight to a charity. It counts toward the required minimum distribution without being added to taxable income.
The IRS says required minimum distributions, or RMDs, begin at age 73. A QCD starts earlier: The owner must be at least 70½ on the day of the distribution.
For anyone already taking RMDs, the deadline is Dec. 31 each year. The penalty for a shortfall is a 25% excise tax, reduced to 10% if you correct the shortfall within two years.
What a QCD has to look like
- The money has to move directly from the IRA trustee to an organization eligible to receive tax-deductible contributions, but donor-advised funds and supporting organizations do not qualify. Depositing a withdrawal yourself and then donating it does not qualify either.
- The contribution must come from an IRA. Ongoing SEP and SIMPLE IRAs are excluded, and money sitting in a 401(k) is not eligible while it stays there.
- The owner has to be at least 70½ when the distribution is made.
- The amount counts toward that year’s RMD, up to the annual limit.
The deadline applies to the transfer, not the intention
A charitable distribution is reported on Form 1099-R for the calendar year it is made. A transfer completed in January counts for 2027 and does nothing for a 2026 RMD. The first-year RMD is the exception, because it can be deferred to April 1 of the following year.
Custodians differ on how long a transfer or a mailed check takes. Asking for the 2026 cutoff date in November costs nothing. Learning it in the last week of December can cost a penalty.
No deduction, and a notation on Form 1040
A QCD excluded from income cannot also be claimed as a charitable deduction. Form 1099-R reports the full amount, so the full amount goes on line 4a of Form 1040. If it was all a QCD, the taxable amount on line 4b is zero, and you check the QCD box on line 4c.
Because the money never enters income, it also lowers modified adjusted gross income. That matters for the $6,000 bonus deduction for people 65 and older, which phases out above $75,000 of modified adjusted gross income, or $150,000 for joint filers.
When the gift is large enough to change the plan
How much to give, and from which account, touches the rest of a withdrawal plan: RMD amounts, taxable income, Roth conversions and Social Security timing. A QCD is also one of the retirement moves that cannot be undone once the money leaves the account.
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Whatever the amount, ask your IRA custodian for its QCD request form and its 2026 cutoff date before Thanksgiving on Nov. 26.
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