QCDs Are More Valuable Than Ever in 2026 — Here's Why

What is a QCD?

A Qualified Charitable Distribution (QCD) is a direct transfer from a traditional IRA to a qualifying charity, made by an account holder who is age 70½ or older. The transferred amount is excluded from taxable income — it never shows up on your return as income, even if you don't itemize deductions.

For 2026, the QCD limit is $111,000 per person (up from $108,000 in 2025). If both spouses have their own IRAs and are 70½ or older, each can make up to $111,000 in QCDs for a combined $222,000.

Why QCDs are more valuable in 2026

The OBBBA made two changes that affect charitable giving for itemizers. First, charitable donations are now only deductible to the extent they exceed 0.5% of adjusted gross income — meaning the first portion of donations generates no deduction at all. Second, the tax benefit of itemized deductions is capped at 35 cents on the dollar for taxpayers in the top bracket.

QCDs bypass both of these limitations entirely. Because a QCD is excluded from income rather than deducted, it isn't subject to the AGI floor or the 35% cap. The full amount reduces taxable income, dollar for dollar.

The RMD connection

A QCD counts toward your required minimum distribution for the year. This is a significant benefit — instead of taking your RMD as income (which increases your AGI, potentially raises your Medicare premiums, and makes more of your Social Security taxable), you can direct all or part of it to charity and exclude it from income entirely.

What doesn't qualify

QCDs must go directly from the IRA to a qualifying 501(c)(3) organization. They cannot be made to donor-advised funds or private foundations. The transfer must be made directly by the IRA custodian — you cannot receive the distribution yourself and then donate it.

The new senior bonus deduction

The OBBBA also created a new deduction for taxpayers age 65 and older — $6,000 per person (or $12,000 for a married couple where both spouses are 65+), phased out as income rises. A QCD can help keep income low enough to qualify for or maximize this deduction, compounding the tax benefit.

If you're 70½ or older and give to charity regularly, a QCD strategy is worth reviewing with your tax preparer before year-end. The deadline for QCDs is December 31 — not April 15.