ARTICLE TAKEAWAYS
A QCD is a distribution of funds from an investor’s IRA directly to a qualified charitable organization. This type of distribution allows eligible IRA owners age 70½ and over to donate to charity without including the amount in their taxable income. QCDs can also count toward satisfying the investor’s required minimum distribution, if applicable. To qualify, the distribution must be made directly to the charity and adhere to Internal Revenue Service (IRS) guidelines.
Limits
The annual QCD limit for 2026 is $111,000 per taxpayer, adjusted annually for inflation.
As an alternative, an individual may take a one-time distribution of up to $55,000 (effective for 2026*) to certain split-interest entities, such as:
This one‑time distribution is not in addition to the annual QCD limit; it is a separate, once‑per‑lifetime option.
Available account types
Qualified organizations
If the organization is qualified and can receive tax-deductible contributions, a QCD is nontaxable. Use the Tax Exempt Organization Search Tool on the IRS’s website to determine whether an organization is qualified.
Tax withholding
Federal and state withholding does not apply for QCDs donated to a qualified charity.
Tax reporting
Beginning in tax year 2026, most QCDs are reported on Form 1099-R with the appropriate distribution code, either Y7 (normal distribution QCD) or Y4 (inherited IRA–related QCD). These reporting changes do not apply to QCDs from a Roth IRA.
Other reporting considerations:
Requesting a QCD
Clients must submit the IRA Qualified Charitable Distribution Request, which includes the required certification language and must be signature guaranteed. A letter of instruction cannot be accepted. Checks are made payable to the charitable organization.
Consult a tax advisor for additional guidance on QCDs.
Footnotes:
* Limit adjusted for inflation annually.
† A QCD cannot be taken from a SIMPLE, SEP or SARSEP IRA if salary deferral or employer contributions have been received for the same tax year.
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