A qualified charitable distribution, or QCD, is a gift sent straight from an individual retirement account to a charity by an IRA owner at least 70½ years old. It is not a deduction. The money never shows up as income. As of 2026 a person can give up to $111,000 this way, and a married couple with separate accounts can each use the full amount.1 The 2026 limit went up. That is not the news. The news is what happened to the alternative. Starting in 2026, a household that itemizes gets no charitable deduction on the first half percent of its income; a new rule lets a non-itemizing couple deduct the first $2,000 of cash giving and no more; and many retirees do not itemize at all. So the same gift, sent two different ways, can now produce very different tax results, and the gap is typically widest for the households already giving the most. What follows is when each way tends to work better, the households for whom a QCD may not be the right move, or not the most important one, and the one ordering rule that can cost a household the entire benefit.
The gift did not get bigger. The path it took changed.
WHAT CHANGED IN 2026
The first half percent of your giving now buys you nothing.
Two things a giving household will likely feel this year.
The first is new. For a household that itemizes, charitable contributions are now deductible only above half a percent of income.2 For a household with $300,000 of income, the first $1,500 given away produces no deduction. It is not reduced. It is gone.
The second is not new but matters more. The standard deduction for a married couple filing jointly is $32,200,3 and for those 65 and older it is higher still. Many retired households never clear it, which often means they don’t itemize, which means they were not getting a charitable deduction to begin with.
Put those together and you have many of the giving households in the country. Either they itemize and may have just lost the benefit on their first gifted dollars, or they take the standard deduction and, beyond the first $2,000 of cash giving, get nothing for the rest.
You can write a check directly to your church and, past the first two thousand dollars, get no tax benefit at all. Some retirees do exactly that, every year.
Why doesn’t writing a check to my church always lower my taxes?
Every household can subtract a flat amount from its income before tax. That amount is the standard deduction. Charitable gifts, along with mortgage interest, state taxes, and a few other things, only lower your taxes to the extent they add up to more than that flat amount. Many retired households never get there, because the mortgage is paid off and the largest deductions went with it. So the gift sits below the line and changes nothing on the return. Beginning in 2026 there is one narrow exception: a couple taking the standard deduction can write off the first $2,000 of cash gifts, and a single filer the first $1,000. Above that, the check still does nothing.
WHY A QCD IS DIFFERENT
A deduction lowers what you’re taxed on. A QCD keeps the gift from ever counting as income.
A deduction is a subtraction. Income arrives on the return, then a charitable deduction reduces the taxable portion of that income. It does not lower adjusted gross income (AGI). A QCD works earlier than that. The amount sent to the charity is left out of income entirely. It bypasses the tax return and lands directly with the charity, so there is nothing to subtract.1
That one difference is why almost none of the changes above touch it. The new floor cannot reduce a QCD, because a QCD is not a deduction. Itemizing does not matter, because a QCD does not require itemizing. A household taking the standard deduction gets the full benefit of a QCD, and beyond the first $2,000, no benefit at all from writing the same check.
A charitable deduction lowers what you are taxed on. A QCD lowers what counts as your income in the first place. Those sound similar. They are not, because a long list of other costs in retirement are keyed to income rather than to taxable income.
THE MEDICARE CONNECTION
Your charity gets the same amount either way.
This is the part worth going slowly on, because it is where the real benefit may be.
IRMAA, the Income-Related Monthly Adjustment Amount, is a surcharge added to Medicare Part B and Part D premiums for higher-income beneficiaries. It is calculated on income, not on taxable income.
Read that again, because it is the whole mechanism. An itemized charitable deduction never touches the income figure, so it can never move an IRMAA tier, no matter how large the gift. The new deduction for couples who do not itemize, capped at $2,000, likely does not either: the tax code lists it among the deductions taken after adjusted gross income is figured.4 Practitioners are still debating whether it reduces AGI or only taxable income, and as of this writing the IRS has not issued final guidance.5 A QCD lowers the income figure dollar for dollar, up to $111,000 in 2026. That is the difference that matters here.
As of 2026, the surcharge starts above $109,000 of modified adjusted gross income for a single filer and $218,000 for a married couple.6 It behaves as a cliff rather than a phase-in: one dollar over the line can trigger the full tier for twelve months, per person, for both Part B and Part D. And it runs two years behind. A gift made in 2026 changes what Medicare charges in 2028.
A hypothetical example. A married couple, both seventy-four, with income projected at $224,000 for the year, about $6,000 over the first threshold. They give $10,000 a year to their church, and they have been writing checks. They take the standard deduction, so those checks have produced almost no tax benefit.
Send the same $10,000 as a QCD from one spouse’s IRA instead. Income drops to roughly $214,000, under the line. The church receives the same amount on the same schedule. What changed is that the couple is now below the threshold rather than above it.
At 2026 rates, the first tier runs about $95.70 a month per person across Part B and Part D, roughly $1,150 a year each, or about $2,300 for the couple.6 That is what the check version would have cost them in 2028, on top of getting almost nothing for the gift.
Assumptions matter and the number moves household by household. The point is not the size. The point is that writing a check directly could not have produced it at any amount.
WHEN A QCD MAY BE THE RIGHT MOVE, AND WHEN IT ISN’T
The same gift can be the right move or the wrong one.
The households a QCD often helps most are not the largest ones, and not the smallest. They are the ones sitting in a particular spot, and the spot isn’t necessarily obvious from the size of the account. Three households, all charitably inclined, all with seven figures somewhere in the picture, and three different right answers.
A pattern I see. A couple in their mid-seventies, taking the standard deduction, with income a few thousand dollars over an IRMAA line, already giving to their church or some other charity every year. For them the QCD may be a clean answer. The gift leaves the IRA, never lands in income, satisfies part of the required minimum distribution, and could pull them back under the surcharge. Nothing on the deduction side could have done any of that.
A pattern I see. A couple with a seven-figure IRA, a few thousand dollars a month of Social Security, and only two or three thousand dollars a month of IRA withdrawals. On paper they look like ideal QCD candidates. For them, the QCD may be the smaller decision. Their deductions may already cover most or all of their income, so a QCD could exclude income that was never going to be taxed and save little or nothing this year. The gift is fine, and a QCD is still a sensible way to make it. The missed opportunity is the retirement tax plan sitting unused behind it. Years like these, with room in the lowest brackets, can be used to convert IRA money to Roth at rates that may be lower than the account faces later, when required distributions grow. The QCD does not get in the way. Because the gift stays out of income, it can leave more room for a conversion in the same bracket. The first question here is not how to give. It is whether these are the years to be converting.
A pattern I see. A household that itemizes and holds stock bought years ago at a fraction of today’s price. For them, giving the shares can beat the QCD on the portion they can deduct, because donating stock held more than a year, rather than selling it, skips the capital-gains tax and deducts today’s value. That edge is largest when they expect to sell the shares during their lifetime, since heirs generally inherit shares without the old gain attached. The IRA is not always where the least-taxed dollars are.
Three households, three answers, and none of the three could have been settled by a rule of thumb. Which one a particular household is comes down to numbers that have to be run rather than a rule that can be looked up. That work is what the Retirement ℞ Plan™ exists to do, and an independent certified public accountant reviews every plan before it reaches the client.
Is it better to do a QCD or donate appreciated stock?
Donating stock held more than a year avoids capital-gains tax on its growth, and a household that itemizes also deducts what the stock is worth today.7 Gifts of appreciated property are deductible up to 30% of income and cash up to 60%; a QCD falls under neither cap, because it is an exclusion rather than a deduction. A few rules of thumb, imperfect but useful, follow.
If you take the standard deduction and are past 70½, the QCD is often the better option.
If a QCD is at least as large as the amount your income sits above an IRMAA threshold, it can clear the cliff, and nothing on the deduction side can.
If you itemize anyway and hold shares with large embedded gains that you expect to sell, appreciated stock often wins on the portion you can deduct.
For many households the answer might be both: the QCD for the IRA portion of annual giving, appreciated shares for the rest.
THE ORDER
The first money out of the account counts toward your required distribution first.
A QCD counts toward a required minimum distribution, but only toward the part of the requirement not already met that year. The first dollars withdrawn in a distribution year are treated as satisfying that year’s requirement, and money that lands in your hands is taxable because it went to you, not to charity. A later QCD cannot reclassify a withdrawal you already took.8
Consider a household with a $20,000 required distribution that plans to give all of it to charity. If an automatic withdrawal pays out $2,000 in January and the household makes a $20,000 QCD in December, the $2,000 is still taxable income. Had the QCD gone first, and the January withdrawal been stopped, that $2,000 would not have been income at all. The gift was the same. The order was not.
Automatic programs are the most common cause, because not many people choose the January distribution, in my experience. It runs on schedule, the way it has every January for years, the custodian reports it, the money is already out, and it cannot be undone. In any year with a required distribution, you may want the QCD to go first, before any other withdrawal and before an automatic distribution runs.
THE BOTTOM LINE
Charity is one of the few places the tax code can work in your favor on something you were going to do anyway.
If you do it from the right account.
A QCD can keep money from ever becoming income, which is a different thing than deducting it. It has been in the tax code since 2006, and it expired and was revived so many times that few could plan around it until it was made permanent in 2015. In 2026 the difference it makes is larger than it has been. A new half-percent floor now erases the deduction on the first slice of an itemizer’s giving, and the standard deduction many retirees cannot clear leaves the rest of them with little to itemize in the first place.
The limit is $111,000 per person for 2026, and changes every year. Eligibility starts at 70½, which for most people now arrives years before required distributions do. The benefit can be forfeited if the withdrawal happens in the wrong order. And for some households, as the patterns above show, a QCD is not the most important move, or not the right one at all. Which of those applies to a household is a question of numbers, not a rule. Running those numbers, at no cost, is where the Retirement Tax Diagnostic™ starts.
The same gift can be the smartest move you make this year or a quiet mistake, and the difference is rarely in the gift itself. If that is how you think about giving in retirement, I’m glad to help. If to you a gift is simply a gift, that is a perfectly good way to give, and it is not the work I do.
