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There are a variety of individual retirement accounts that can be used.   Commonly known as an IRA, individuals invest money and pay no Federal Income Tax on the earnings until they withdraw the money or proceeds from the investment when they retire. 

The earned money stays in the IRA and investments grow faster due to compounding of interest.  Also  by retirement some individuals may be earning less income and be paying taxes at lower tax rate.  And with the Qualified Charitable Distribution you further reduce your tax liabilities in retirement.

Who can make a QCD?

The IRA owner must be at least 70½ years old on the date of the distribution. This age requirement is different from the age when minimum distributions generally begin.

Under current federal rules, many traditional IRA owners must begin taking required minimum distributions at age 73. A person can therefore become eligible to make a QCD before becoming subject to a Required Minimum Distribution (RMD).

For 2026, an eligible IRA owner may make up to $111,000 in qualified charitable distributions during the year. The limit applies separately to each spouse. If both spouses qualify and each has an IRA, each may make QCDs from their own account, subject to the individual limit.

How can a QCD help with an RMD?

A QCD can satisfy all or part of an IRA owner’s required minimum distribution.

Suppose a donor must withdraw $20,000 from an IRA this year and already plans to contribute $5,000 to qualified charities. The donor could instruct the IRA custodian to send $5,000 directly to those charities. That amount could count toward the $20,000 RMD, leaving $15,000 to be withdrawn separately.

The potential benefit is that the $5,000 QCD would generally not be included in the donor’s taxable income.

Keeping income lower may be particularly valuable to taxpayers who do not itemize deductions. It may also help limit the effect of income on other tax calculations, including the taxable portion of Social Security benefits and income-related Medicare premiums. The actual result depends on the donor’s complete financial and tax circumstances.

What rules must be followed?

Several requirements deserve careful attention:

• The distribution must come from an eligible IRA. Traditional, rollover, and inherited IRAs may qualify. Special restrictions apply to SEP and SIMPLE IRAs.
• The IRA owner must be at least 70½ when the payment is made.
• The payment must generally go directly from the IRA custodian to the charity.
• The receiving organization must be eligible to receive QCDs. Donor-advised funds, private foundations, and certain supporting organizations generally do not qualify.
• The donor cannot receive goods or services in exchange for the contribution.
• The charity should provide a written acknowledgment of the gift.
• The transaction must be completed by December 31 to count for that tax year.

A check made payable to the IRA owner usually becomes a normal taxable distribution—even if the individual later gives the money to charity. The payment should be made payable directly to the charitable organization.

If an IRA provides check-writing privileges, the charity must generally receive and process the check before the year-end deadline. Waiting until the final days of December creates unnecessary risk.

How is the gift reported?

The IRA custodian reports on the distribution on Form 1099-R. The taxpayer generally reports the full IRA distribution on the federal tax return and identifies the taxable portion. When the entire distribution qualifies as a QCD, the taxable amount may be zero, with “QCD” entered as directed on the return.

The custodian may not automatically determine how much of the distribution qualifies. Donors should retain the charity’s acknowledgment and give complete records to their tax preparer.

Is a QCD right for everyone?

A QCD may be attractive when a person:

• Is at least 70½;
• Owns an eligible IRA;
• Plans to support qualified charities;
• Must take an RMD; or
• Does not receive much benefit from itemizing charitable deductions.

It may not be the best strategy in every situation. Donating appreciated securities, bunching several years of gifts, or using another charitable-planning method may provide a better result for some households.

The practical first step is simple: decide which charities you want to support, verify that they qualify, and ask your IRA custodian about its QCD procedure. Before completing the transaction, consult a qualified tax or financial adviser who understands your individual circumstances.

Sources: IRS guidance on IRA distributions and QCDs, IRS Publication 590-B, IRS Publication 526, and Fidelity’s 2026 QCD overview.