A qualified charitable distribution (QCD) is a direct transfer from your IRA to a qualified charity that never enters your taxable income. If you are at least 70½, you can give up to $111,000 in 2026 (up from $108,000 in 2025), and the amount counts toward your required minimum distribution while staying off your tax return entirely. That last part is the whole point: a QCD lowers your adjusted gross income, which a charitable deduction does not.
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I have a running frustration in this job: charitably minded retirees in Boston write checks to their church or the food bank out of a checking account while a required minimum distribution sits in the same tax year doing nothing but raising their income. Those two facts should be connected.
How does a qualified charitable distribution actually work?
You tell your IRA custodian to send money directly to a 501(c)(3) charity. The check or wire goes from the IRA to the charity — it never touches your hands, and it never appears as income.
That directness is not a formality. If the custodian pays you and you then write a personal check, you have taken a taxable IRA distribution and made a separate gift — two transactions with very different outcomes. Most custodians let you request a QCD online or issue a checkbook tied to the IRA; if you use those checks, write them early, because the distribution is dated when the check clears.
Why is a QCD better than just deducting the donation?
Because a deduction reduces taxable income, while a QCD reduces adjusted gross income — and AGI is what drives Medicare premiums, Social Security taxation, and a long list of phaseouts. A deduction also only helps if you itemize, and after the 2026 standard deduction of $32,200 for a married couple (plus $1,650 per spouse age 65 or older, for $35,500 total), most retirees do not.
Here is the comparison for a married couple, both 74, taking a combined $80,000 RMD and giving $20,000 a year. Assume the 22% federal bracket and $18,000 of Massachusetts and property taxes.
| Write a $20,000 check | $20,000 QCD | |
|---|---|---|
| RMD included in AGI | $80,000 | $60,000 |
| Deduction taken | Itemize $38,000 | Standard $35,500 |
| Gained vs. standard deduction | $2,500 | — |
| Federal benefit at 22% | ~$550 | ~$4,400 |
| Income removed from AGI | $0 | $20,000 |
Same $20,000 to the same charity: one route saves roughly $550, the other roughly $4,400. That is not a loophole. Giving from a pre-tax account means the money is never taxed to anyone; giving from checking means it was taxed to you first.
Does a QCD help with Medicare premiums?
Often dramatically, because Medicare’s income-related surcharge is a cliff rather than a slope. One dollar over a bracket line costs you the full step.
For 2026, a married couple with modified AGI of $218,000 or less pays the standard Part B premium of $202.90 per month. At $218,001, both spouses jump to $284.10 for Part B plus a $14.50 Part D surcharge — about $2,300 a year in extra premiums for the couple, triggered by a single dollar. A couple sitting at $225,000 of MAGI who redirects $20,000 of their RMD into a QCD lands at $205,000 and clears the cliff entirely. The QCD paid for itself before you count any income tax savings. I walk through the full table in my breakdown of the 2026 Medicare IRMAA brackets.
Mind the lookback: your 2026 premiums are based on your 2024 return. The QCD you do this year protects your premiums two years out, not the bill on your desk today. Current amounts are published at Medicare.gov’s cost page.
What does a QCD do in Massachusetts specifically?
Less than people expect on the deduction side, and more than people expect everywhere else. Massachusetts restored its own charitable contribution deduction for tax years beginning in 2023, available whether or not you itemize federally — so against the 5% state rate, the pure deduction advantage is closer to a wash.
What still matters here is everything AGI touches. Keeping $20,000 or $50,000 of RMD income off the return helps protect against the 4% surtax on taxable income above $1,083,150 — very relevant in a year when a house sale or large capital gain stacks on top of retirement income. If you are weighing state tax burden more broadly, I wrote an honest assessment of whether leaving Massachusetts lowers your retirement taxes.
What are the rules that trip people up?
Six of them, and each can void the tax treatment entirely.
- Age 70½, not 73. The trigger is the actual date you turn 70½. Money sent a week early is a taxable distribution. That is nearly three years before RMDs begin at 73 — a window to use QCDs before being forced to take anything.
- IRAs only. Traditional IRAs, and inherited IRAs if the beneficiary is 70½ or older. Not an active 401(k) or 403(b). SEP and SIMPLE IRAs qualify only if not receiving employer contributions that year.
- No donor-advised funds. QCDs cannot go to a DAF, a private foundation, or a supporting organization — the gift must reach an operating public charity.
- First dollars out satisfy the RMD. Take your full $80,000 RMD in February and do the QCD in November, and the QCD offsets nothing — you already recognized the income. Do the QCD first.
- Post-70½ deductible IRA contributions claw it back. If you are still working and making deductible IRA contributions after 70½, they reduce your QCD exclusion dollar for dollar, cumulatively, for life.
- Your 1099-R will not say “QCD.” Custodians report the full gross distribution. You or your preparer must report the exclusion on Form 1040 line 4b with “QCD” noted, and you need written acknowledgment from the charity confirming no goods or services were received.
That last one causes real problems. I have seen a correctly executed $30,000 QCD reported as fully taxable because the preparer worked from the 1099-R alone. Tell your preparer in writing, every year.
How much can I give, and is there a bigger one-time option?
The 2026 limit is $111,000 per person — $222,000 for a married couple who each have their own IRA, since the cap is per taxpayer, not per return.
Those figures come from IRS Notice 2025-67, the 2026 retirement plan cost-of-living adjustments, which also confirms a one-time election allowing up to $55,000 of a QCD to fund a split-interest arrangement such as a charitable remainder trust. That election is legitimate but complicated and irrevocable — worth a real conversation first. Most people are better served by straightforward annual QCDs. The IRS’s FAQs on IRA distributions and withdrawals cover the mechanics.
Where does a QCD fit in a broader tax plan?
It is one of three levers for a pre-tax IRA that has grown too large. Roth conversions shrink it by paying tax voluntarily at a chosen rate. QCDs shrink it by never paying tax at all, but only up to what you actually want to give away. Withdrawal sequencing decides which account funds your spending.
For a couple with a $2.5 million IRA giving $25,000 a year, QCDs alone remove roughly $250,000 of future taxable income over a decade — changing both their RMD trajectory and what their children inherit under the inherited IRA 10-year rule. If you are also weighing bunched gifts or appreciated stock, my post on smarter charitable giving under the Big Beautiful Bill covers how those stack.
One honest caution: QCDs are worth less to people who are not already charitable. If you would not otherwise give $20,000 away, a QCD does not make you richer — it makes a gift cheaper. This is for people giving anyway, from the wrong account.
Why does this get missed so often?
Because it requires someone looking at your tax return and your charitable giving in the same conversation, before December, every year — and most advisory relationships are not structured to do that.
At Evergreen Wealth Management, I charge a flat monthly fee of a flat monthly fee regardless of portfolio size. That matters here specifically. An advisor billing 1% on a $2.5 million portfolio collects $25,000 a year, and every dollar moved out of that portfolio to charity reduces their revenue. A QCD is, structurally, a pay cut for an AUM advisor. I am not suggesting anyone consciously withholds the advice, but I would rather not have the incentive in the room at all.
As a fee-only fiduciary I hold no commissions and sell no products, and QCD planning is part of the annual tax work already bundled into the fee. You can see exactly how the pricing works on our fee structure page, or read about my background as a CFP® professional.
Frequently Asked Questions
Can I do a QCD if I am not yet 73 and have no RMD?
Yes. Once you reach 70½ you can make QCDs even though RMDs do not begin until 73. This is an underused window: giving from the IRA between 70½ and 73 shrinks the balance before RMDs are ever calculated, which permanently lowers every future RMD.
Does a QCD reduce the taxes on my Social Security benefits?
Only in a specific income range. Social Security becomes up to 85% taxable once combined income exceeds $44,000 for a married couple — a threshold unchanged since 1993. Just above that line, a QCD can pull you back under. At $200,000 of income your benefits are already 85% taxable and a QCD will not change that.
Does Evergreen charge extra to handle QCD planning?
No. Evergreen Wealth Management is a flat-fee firm in Boston, Massachusetts: a flat monthly fee covers financial planning and investment management together, and tax planning — timing QCDs, coordinating them with Roth conversions, confirming your preparer reports them correctly — is part of that. No separate planning fee, no percentage of assets.
What is the deadline for a 2026 QCD?
December 31, 2026 — and the money must be out of the IRA by then, not merely requested. Unlike IRA contributions, there is no April grace period. If you use IRA checks, allow several weeks for the charity to deposit and the check to clear. I start these conversations with clients in October for that reason.
The bottom line
If you are 70½ or older, own a traditional IRA, and give to charity, you should almost certainly be giving through a QCD instead of a checkbook. The 2026 ceiling of $111,000 per person is far above what most families give, the mechanics take one call to your custodian, and the AGI reduction protects Medicare premiums and Massachusetts thresholds in ways a deduction cannot. The only real work is remembering to do it before you take the rest of your RMD.
If you would like a second set of eyes on how your required distributions, charitable giving, and Roth conversion room fit together this year, you can see how becoming a client works — it starts with a conversation, not a pitch. You can also read through some real planning scenarios.
Nick Stevens, CFP® is the founder of Evergreen Wealth Management in Boston, a flat-fee financial planning and investment management firm. Evergreen charges a fixed monthly fee regardless of portfolio size. Learn more about how we work at our fee structure or get in touch at contact us.
This article is for educational purposes and is not individualized tax advice. Figures cited are for 2025 and 2026 and are subject to change. Confirm your situation with a qualified tax professional.