Retirement and Tax Planning Guide
Qualified Charitable Distribution Limit 2026: Rules, RMD Coordination, and Year-End Timing
The qualified charitable distribution limit for 2026 is $111,000 per IRA owner, according to IRS Notice 2025-67. Here is how a QCD works with your required minimum distribution, why keeping the gift out of AGI matters more under the 2026 rules, and what to finish before December 31.
The Short Answer
What Is a Qualified Charitable Distribution?
A qualified charitable distribution (QCD) is a direct transfer from an IRA to an eligible charity by an owner age 70½ or older. For 2026, the qualified charitable distribution limit is $111,000 per person. A QCD can count toward a required minimum distribution, and the amount is excluded from adjusted gross income rather than taken as a deduction.
That last point is the one most retirees underestimate. A deduction lowers taxable income only if you itemize and only after certain floors and limits. An exclusion keeps the dollars out of AGI entirely, which can affect Medicare premiums, the taxation of Social Security benefits, and other AGI-based thresholds. Results depend on your full tax picture, and a QCD is not the right tool for every gift.
Sources: IRS Notice 2025-67; IRS IRA Distribution FAQs. As of October 8, 2026.
2026 QCD Rules at a Glance
- 1Annual limit of $111,000 per IRA owner, up from $108,000 in 2025. Married couples may each give up to the limit from their own IRAs.
- 2One-time election of up to $55,000 to a charitable remainder annuity trust, charitable remainder unitrust, or charitable gift annuity.
- 3You must be at least 70½ on the date of the transfer, not just by year-end.
- 4Funds must move directly from the IRA custodian to the charity. A withdrawal you later donate is not a QCD.
- 5Donor-advised funds, supporting organizations, and most private foundations are not eligible recipients, per IRS Publication 590-B.
The 2026 Numbers
Four Figures That Shape QCD Planning This Year
$111,000
Annual QCD limit per IRA owner
$55,000
One-time split-interest QCD limit
70½
Minimum age on the transfer date
0.5%
AGI floor on itemized charitable deductions
Sources: IRS Notice 2025-67 and IRS Publication 505 (2026). As of October 8, 2026.
Why 2026 Is Different
Why the AGI Exclusion Matters More Under the 2026 Charitable Deduction Floor
Starting in tax year 2026, itemizers may deduct charitable contributions only to the extent they exceed 0.5% of AGI, according to IRS Publication 505. Top-bracket taxpayers also face a separate limitation on the value of itemized deductions. For a retiree with sizable RMDs, both rules shrink the benefit of writing a check and deducting it.
Non-itemizers gain a new deduction for qualifying cash gifts of up to $1,000, or $2,000 for married couples filing jointly, per the same publication. For most of the affluent retirees we work with, that amount is small relative to annual giving.
A QCD sidesteps both issues because it is never counted in income in the first place. There is no floor to clear and no requirement to itemize. The trade-off: you cannot also claim a charitable deduction for the same dollars.
The IRMAA Connection
Medicare Part B premiums are based on modified AGI from two years earlier, so QCDs made in 2026 may affect 2028 premiums. The 2026 brackets published by CMS show how quickly premiums step up:
| Individual MAGI | Joint MAGI | Monthly Part B |
|---|---|---|
| $109,000 or less | $218,000 or less | $202.90 |
| Above $109,000 up to $137,000 | Above $218,000 up to $274,000 | $284.10 |
| Above $137,000 up to $171,000 | Above $274,000 up to $342,000 | $405.80 |
| Above $171,000 up to $205,000 | Above $342,000 up to $410,000 | $527.50 |
| Above $205,000, below $500,000 | Above $410,000, below $750,000 | $649.20 |
| $500,000 or more | $750,000 or more | $689.90 |
Per person, per month. Source: CMS 2026 Medicare Parts A and B Premiums and Deductibles. Future thresholds may differ.
RMD Coordination
How to Coordinate a QCD With Your Required Minimum Distribution
A QCD can satisfy all or part of an RMD, but the order of operations matters. Our 2026 RMD rules guide covers ages, deadlines, and calculations. These are the coordination steps we walk through with clients.
Make the QCD Before Other Withdrawals
The first dollars out of an IRA in a year count toward the RMD. If you take your full RMD in cash in March, a QCD in December does not undo that taxable income. Sequencing the QCD first is designed to keep more of the RMD out of AGI.
Consider QCDs Before RMDs Begin
QCD eligibility starts at 70½, which is earlier than the age when RMDs begin for most retirees. QCDs in those years may reduce the IRA balance that future RMDs are calculated on, although they provide no RMD credit until RMDs actually apply.
Pair QCDs With Roth Conversion Planning
A QCD cannot be converted, and an RMD must be satisfied before any conversion. Lowering AGI with a QCD can create room for a conversion in the same year without moving into a higher bracket or IRMAA tier. See converting an IRA to Roth after age 72 for the trade-offs.
Check Inherited IRA Eligibility
Beneficiaries who are 70½ or older can generally make QCDs from inherited IRAs, which can help with annual distributions under the 10-year rule. Our inherited IRA rules guide explains which beneficiaries face annual RMDs.
Use the Right Account Type
QCDs come from IRAs. Employer plans such as 401(k)s generally do not allow them, and the IRS does not permit QCDs from an ongoing SEP or SIMPLE IRA. A rollover to a traditional IRA may be needed first, with timing that respects the RMD rules.
The Pennsylvania Angle
For Pennsylvania Retirees, the QCD Benefit Is Federal and IRMAA-Driven
Pennsylvania generally does not tax IRA distributions for retirees who meet the state's retirement requirements, according to the Pennsylvania Department of Revenue. Pennsylvania also offers no individual charitable deduction. As a result, a QCD typically produces no Pennsylvania income tax benefit for a Pittsburgh-area retiree.
The value shows up on the federal return and in Medicare premiums. That changes how we compare giving tools for Pennsylvania families.
Appreciated Stock Gets a State Edge
Pennsylvania taxes capital gains under its flat personal income tax. Donating long-held appreciated shares instead of selling them may avoid both federal and Pennsylvania tax on the gain. See our Pennsylvania capital gains guide.
Other States Treat QCDs Differently
In states that tax IRA withdrawals and start from federal AGI, the QCD exclusion often carries through to the state return. Some states decouple or have their own retirement income exclusions with dollar limits. If you split time between Pennsylvania and another state, residency and conformity rules should be reviewed with your CPA.
Inheritance Tax Still Applies to What Remains
IRA balances left to children can be subject to Pennsylvania inheritance tax and federal income tax for heirs. Lifetime QCDs reduce that balance, which may matter for families already planning to leave assets to charity.
Side-by-Side Comparison
QCD vs. Donor-Advised Fund vs. Gifting Appreciated Stock
Each approach can support charitable goals, and many retirees use more than one. The right mix depends on age, IRA size, embedded gains, and whether you itemize. This table is educational and does not reflect any individual recommendation.
| Feature | QCD From an IRA | Donor-Advised Fund | Appreciated Stock to Charity |
|---|---|---|---|
| Who can use it | IRA owners and beneficiaries age 70½ or older | Any donor | Any donor with appreciated taxable holdings |
| 2026 dollar limit | $111,000 per owner per year | No fixed cap; deduction subject to AGI percentage limits | No fixed cap; deduction subject to AGI percentage limits |
| Federal tax treatment | Excluded from AGI; no deduction | Itemized deduction above the 0.5% AGI floor | Itemized deduction above the floor; gain not realized |
| Counts toward RMD | Yes | No | No |
| Requires itemizing | No | Yes, for a deduction | Yes, for a deduction |
| Effect on IRMAA | May lower MAGI directly | Deductions do not reduce AGI | Avoids adding the gain to AGI |
| Pennsylvania impact | Usually none for qualifying retirees | No PA charitable deduction | May avoid PA tax on the gain |
| Timing flexibility | Annual; must leave the IRA by Dec 31 | Fund now, grant to charities over time | Annual; transfer must settle by Dec 31 |
| Key limitations | Cannot go to a DAF or most private foundations | Irrevocable; QCDs are not allowed into DAFs | Requires holding appreciated shares; lot selection matters |
Sources: IRS Notice 2025-67, IRS Publication 505 (2026), IRS Publication 590-B. For larger, multi-year gifts, a charitable remainder trust may also be worth evaluating.
Year-End Timing
Your 2026 QCD Year-End Checklist
A QCD counts for the year the funds leave your IRA. Custodians often slow down in December, and checks mailed to a charity can create questions about which year the gift belongs to. We generally suggest starting the process in October or early November.
Every year we review the plan, tax picture, and portfolio with clients in the fourth quarter. QCD timing is one of the items on that list because it interacts with RMDs, conversions, and capital gains in the same year.
Common Questions
Qualified Charitable Distribution FAQs
Can my QCD be larger than my RMD?
Yes. A QCD can exceed your RMD, up to the $111,000 annual limit for 2026. The excess does not carry forward to satisfy a future year's RMD, so giving more than your RMD in one year has no effect on next year's requirement.
How does the IRS know you made a QCD?
Through two sources. Starting with tax year 2025, IRA custodians can flag a QCD on Form 1099-R with distribution code Y in box 7. The IRS has said using code Y is optional for 2025 and 2026, so not every custodian will apply it. Either way, you report the QCD yourself on Form 1040, and that return is what the IRS relies on. Keep the custodian's records and each charity's written acknowledgment in case the IRS asks for support.
Do I need to withhold taxes on a QCD?
No. Because a properly made QCD is excluded from income, withholding is not needed. If tax is withheld, the withheld amount went to the IRS, not the charity, so it is not part of the QCD and is treated as a taxable distribution.
How is a QCD reported on Form 1099-R?
Custodians that use the new code generally enter Y7 in box 7 for a QCD from your own IRA, or Y4 for a QCD from an inherited IRA. Box 1 shows the gross distribution, and box 2a generally still shows the amount as taxable, because the custodian does not subtract the QCD for you. On Form 1040, you report the full distribution on line 4a, enter only the non-QCD portion on line 4b (zero if the whole amount went to charity), and check the QCD box on line 4c. That box takes the place of the old practice of writing "QCD" next to the line. Because code Y remains optional for 2026, check your 1099-R and confirm the treatment with your tax preparer.
Sources: IRS Instructions for Forms 1099-R and 5498; IRS: Entering Code Y in Box 7 Is Optional; IRS Form 1040 Instructions. As of October 8, 2026.
Can I make a QCD to my church?
Generally yes, if the church qualifies as a 501(c)(3) public charity. You cannot receive anything of value in return, so gifts tied to benefits such as event tickets or meals may not qualify. Request a written acknowledgment for each gift.
Can a QCD go to a donor-advised fund?
No. IRS Publication 590-B excludes donor-advised funds and supporting organizations, and most private foundations are also ineligible. Families who use a DAF often pair it with QCDs, sending IRA dollars directly to charities and funding the DAF with appreciated stock.
What are the disadvantages of a QCD?
You cannot also deduct the gift, the timing and recipient rules are strict, and the benefit is limited if your AGI is already low. For Pennsylvania retirees, there is usually no state tax benefit. Deductible IRA contributions made after age 70½ can also reduce the amount of a QCD that is excluded from income.
What are common QCD mistakes to avoid?
Common errors include withdrawing the money yourself before donating, taking the RMD in cash before the QCD, giving to an ineligible recipient, starting too close to December 31, missing the written acknowledgment, and failing to tell your tax preparer, which can result in the full distribution being taxed.
How We Help
Charitable Giving Coordinated With Your Tax and Retirement Plan
Defiant Capital Group is an independent, fiduciary RIA based in the Pittsburgh area. Our team provides tax planning that coordinates QCDs with RMDs, Roth conversions, capital gains, and estate goals, and works alongside your CPA and estate attorney. Outcomes depend on individual circumstances, and some years a QCD may not be the most efficient choice.
This guide was written by Jonathan Dane, CFA, CFP®, Co-Founder and Chief Investment Officer of Defiant Capital Group.
Sources (as of October 8, 2026)
- IRS, Notice 2025-67, 2026 QCD and split-interest limits: irs.gov/pub/irs-drop/n-25-67.pdf
- IRS, Retirement Plans FAQs Regarding IRA Distributions: irs.gov
- IRS, Publication 505 (2026), charitable floor and non-itemizer deduction: irs.gov/publications/p505
- IRS, Publication 590-B, eligible QCD recipients: irs.gov/publications/p590b
- CMS, 2026 Medicare Parts A and B Premiums and Deductibles: cms.gov
- Pennsylvania Department of Revenue, personal income tax guidance: revenue.pa.gov
Before December 31
Plan Your 2026 QCDs Alongside Your RMD, Roth, and IRMAA Picture
If you are 70½ or older and give to charity each year, a short review now may help you sequence QCDs, RMDs, and other year-end moves before custodian deadlines arrive.
Schedule a ConsultationCall 412-697-1435 or email defiant@defiantcap.com
Warrendale | Wexford | Pittsburgh, PA