Qualified Charitable Distributions in 2026 The Complete Plain-English Guide for IRA Owners.

Americans gave $617.2 billion to charity in 2025, the first time giving has ever crossed the $600 billion line, according to the Giving USA 2026 report. Most of that generosity came from individuals. And most of those individuals gave the expensive way, writing personal checks with money that had already been taxed, then taking the standard deduction and receiving no tax recognition for the gift at all.

Sitting quietly in the tax code since 2006 is a different path. It is called the Qualified Charitable Distribution, or QCD, and in 2026 it lets an IRA owner age 70½ or older send up to $111,000 per year directly from an IRA to charity without any of it landing in taxable income.

This guide covers the whole rule in plain English: what a QCD is, the current numbers, how the process works step by step, what it looks like inside a self-directed IRA that holds assets like rental property or notes, and the questions worth asking before you sign anything. It is the cornerstone of our September series, and each section below gets its own deeper article this month.

One thing before we start. Mountain West IRA is a self-directed IRA and Solo 401(k) administrator. We handle paperwork, recordkeeping, and reporting. We do not give tax advice, and nothing here is a recommendation. We teach process, not pricing. Your own tax professional is the right person to tell you what any of this means for your situation.

‍

What Is a Qualified Charitable Distribution? (Week 1: The Concept)

A Qualified Charitable Distribution is a payment that goes directly from an IRA to a qualified charity. The word directly is doing all the work in that sentence. The money moves from the retirement account, through the administrator, straight to the charity. It never passes through the account holder’s hands.

Why does the path matter? Because of how the tax return treats it.

A normal distribution from a traditional IRA counts as taxable income. If you then donate that money, you can only deduct the gift if you itemize, and starting in 2026, only the portion above a floor of 0.5% of your adjusted gross income. A QCD skips that entire structure. The amount is excluded from income altogether. No itemizing required, no floor to clear, no cap to worry about.

That exclusion is why the QCD became the most talked-about giving rule of 2026. This year, new tax rules took effect for ordinary charitable deductions: itemizers face the new AGI floor, donors in the top bracket saw the value of their deduction capped at 35%, and non-itemizers got a modest deduction of up to $1,000 for single filers and $2,000 for joint filers. The QCD was untouched by all of it, because it never relied on the deduction system to begin with.

The numbers for 2026, straight from IRS Notice 2025-67: up to $111,000 per person per year. The limit is individual, so a married couple where each spouse has an IRA and each meets the age rule can give up to $222,000 combined. There is also a once-per-lifetime election to direct up to $55,000 of a year’s QCD to a split-interest entity such as a charitable remainder trust or charitable gift annuity, which we cover briefly in the what-ifs section below.

The eligibility rules, in one paragraph: you must be 70½ or older on the actual date of the distribution, the money must come from an IRA rather than a workplace plan, the recipient must be a qualified 501(c)(3) organization, and you must receive nothing of value in return. Donor-advised funds, private foundations, and supporting organizations are excluded by the statute.

‍

How Does a QCD Actually Work, Step by Step? (Week 2: The Mechanics)

Here is the anatomy of a QCD from request to tax return, using the vocabulary you will actually encounter.

The request. The account holder directs their administrator to send a payment from the IRA to a named charity. At Mountain West IRA that direction comes from the account holder in writing. The account holder chooses the charity. We never do.

The payment. The check or transfer is made payable to the charity, never to the account holder. Some IRA arrangements allow account-holder checkwriting where a check written directly to the charity can qualify, but the payable-to line is what matters. A check made out to you personally, deposited, and re-donated is not a QCD. It is a taxable distribution followed by an ordinary donation.

The verification. The charity must be eligible. The IRS Tax Exempt Organization Search tool at irs.gov lets anyone confirm a charity’s 501(c)(3) status in about a minute. This is also where the phrase “IRS approved” should set off alarms. The IRS approves nothing and endorses nothing. It recognizes tax-exempt status, and that is all.

The acknowledgment. The charity provides a written acknowledgment of the gift, the same contemporaneous receipt rule that applies to other charitable gifts, and the account holder keeps it with their tax records.

The deadline. A QCD counts for the calendar year in which it leaves the account. December 31 is the cutoff, with no extensions. Year-end is also when every administrator’s processing queue is longest, so experienced givers move well before December.

The RMD interaction. Once required minimum distributions begin at age 73, a QCD counts toward the year’s RMD, dollar for dollar, up to the amount of the RMD. Timing matters here because of what practitioners call the first-dollars-out rule: the first money withdrawn in a year is treated as satisfying the RMD. Someone who takes their full RMD in February and then attempts a QCD in November has already banked a taxable RMD. The QCD still excludes its own amount, but it cannot reach back and un-tax the February withdrawal. Sequencing questions like this are exactly what a tax professional is for.

The paperwork trail. The administrator reports the distribution on Form 1099-R. Starting with recent tax years the IRS added Code Y in Box 7 to flag QCDs, though its use is optional and many forms simply show a normal distribution code. Either way, the exclusion is claimed by the taxpayer on Form 1040, where the QCD amount is subtracted and the notation “QCD” is entered beside the line. The form does not do it for you, and neither does the administrator. This surprises almost everyone.

‍

What Does a QCD Look Like in a Self-Directed IRA? (Week 3: The Story)

Everything above applies to any IRA. Self-direction adds one practical layer: the assets inside the account.

A self-directed IRA can hold assets like rental real estate, promissory notes, and precious metals. Those assets generate cash that flows back into the account. Rent lands in the IRA. Note payments land in the IRA. Over the years, an account built around income-producing assets accumulates cash alongside the assets themselves.

A QCD is paid in cash from the account. That means the account needs enough uncommitted cash on hand to cover the gift, and that turns charitable planning into liquidity planning. An account holder whose IRA collects steady rent may find the cash builds naturally. An account holder whose IRA holds a single property and little else may need to plan a year ahead, letting rental income accumulate before directing a gift.

Our Week 3 article walks through a full composite example: a couple in their mid-seventies whose self-directed IRA holds a rental property, who direct a portion of the accumulated rental income to their church and a local food bank as QCDs, handled correctly from written direction through Form 1099-R. It also tells the version where it goes wrong, involving a distribution check that touched the wrong hands on its way to the charity. Composite example for education. Not a real client. Not a recommendation.

The administrator’s role in that story is worth restating, because it defines our lane. Mountain West IRA prepares the paperwork, sends the payment directly to the charity at the account holder’s direction, and issues the required tax reporting. We do not evaluate charities, we do not advise on amounts or timing, and we do not weigh in on whether a QCD fits anyone’s plan. Process is our product. The decisions belong to the account holder and their own professionals.

‍

What Should You Ask Before Making a QCD? (Week 4: The What-Ifs)

The rule has edges, and the edges are where good questions live. These are the ones worth bringing to your own tax and legal professionals.

Can an inherited IRA make a QCD? Yes, if the beneficiary who now owns the account is 70½ or older. The age rule follows the current owner, not the original one.

What about IRA contributions after 70½? Deductible IRA contributions made after age 70½ can reduce the amount of a QCD that qualifies for exclusion, under an offset rule added by the SECURE Act. Anyone still contributing to an IRA in their seventies wants a tax professional in the loop before directing a QCD.

What is the one-time split-interest election? Once in a lifetime, up to $55,000 (2026 figure) of a year’s QCD can go to a charitable remainder trust or charitable gift annuity. These are real legal entities with their own paperwork, costs, and consequences, and the decision sits squarely with the account holder’s own tax and legal professionals.

Can the QCD go to any charity I like? It must be a qualified 501(c)(3), and it cannot be a donor-advised fund, private foundation, or supporting organization. Churches and religious organizations generally qualify. Verify before you give, in the IRS search tool.

What are the red flags? Anyone marketing an “IRS approved” charitable arrangement. Any suggestion that you can receive something of value back from the gift. Any pitch attaching a specific opportunity to your charitable giving. Education about how a rule works never needs to sell you anything, and that is a reliable way to tell the two apart.

Week 4 closes the month with our office-hours episode, where we answer real viewer questions collected all month, and the final chapter of The Giving Kit: ten questions to ask before you give from a retirement account.

‍

The Giving Kit: September’s Collectible Manual

Each week this month we release one chapter of The Giving Kit, a free four-part manual you can collect and keep:

Chapter 1, The QCD Quick-Check, a one-page eligibility checklist matching this article. Chapter 2, Anatomy of a QCD, an annotated diagram of the process from written direction to tax form. Chapter 3, The Giving Worksheet, a planning page for cash timing inside a self-directed account. Chapter 4, Ten Questions to Ask Before You Give, the conversation starter for your own professionals.

‍

Frequently Asked Questions

What is a Qualified Charitable Distribution? A QCD is a payment sent directly from an IRA to a qualified 501(c)(3) charity. The amount, up to $111,000 per person in 2026, is excluded from the account holder’s taxable income. The account holder must be 70½ or older on the date of the distribution.

How much can I give from my IRA to charity in 2026? Up to $111,000 per person for 2026, per IRS Notice 2025-67. Married couples where each spouse has an IRA and each meets the age rule can give up to $222,000 combined.

Does a QCD count toward my required minimum distribution? Yes. A QCD counts toward the year’s RMD dollar for dollar, up to the amount of the RMD. Timing matters because the first money withdrawn in a year is treated as satisfying the RMD first, so sequencing is a question for your tax professional.

At what age can I make a QCD? Age 70½. The account holder must have actually reached 70½ on the date of the distribution. This is different from the RMD starting age, which is currently 73.

Can I make a QCD to a donor-advised fund? No. Donor-advised funds, private foundations, and supporting organizations are excluded by law. The recipient must be a qualified 501(c)(3) that is none of those.

Can I make a QCD to my church? Churches and religious organizations generally qualify as 501(c)(3) organizations, and can generally receive QCDs. Verify any organization with the IRS Tax Exempt Organization Search tool before giving.

Can a QCD come from a 401(k) or Solo 401(k)? No. QCDs come from IRAs. Workplace plans such as 401(k)s do not qualify, and SEP or SIMPLE IRAs that are still receiving employer contributions are also excluded.

Can an inherited IRA make a QCD? Yes, if the current beneficiary is 70½ or older. The age test applies to the person who owns the account now.

How is a QCD reported on taxes? The administrator reports the distribution on Form 1099-R, in some cases flagged with Code Y in Box 7. The taxpayer claims the exclusion on Form 1040 by subtracting the QCD amount and writing “QCD” next to the line. The exclusion is not automatic.

Can I receive anything in return for a QCD? No. The account holder cannot receive anything of value in exchange, including event tickets, auction items, or gifts. Any benefit received can disqualify the exclusion.

What is the deadline for a QCD? December 31 of the tax year, with no extensions. The distribution must leave the account by year end, and year-end processing queues make early action the practical rule.

Can a self-directed IRA that owns real estate make a QCD? Yes, from the cash inside the account. QCDs are paid in cash, so an account holding property or notes needs sufficient uncommitted cash, often accumulated from rent or note payments, before directing a gift.

What is the one-time $55,000 QCD election? A once-per-lifetime option to direct up to $55,000 (2026 limit) of a QCD to a split-interest entity such as a charitable remainder trust or charitable gift annuity. It involves real legal structures and deserves professional guidance.

Is anything “IRS approved”? No. The IRS approves and endorses nothing. It recognizes tax-exempt status, which anyone can verify using the IRS Tax Exempt Organization Search tool. Treat the phrase “IRS approved” as a warning sign.