If you are over 70½ and you give to charity, 2026 changed the tax landscape, just not in the direction many expected. The new rules narrow the charitable deduction for nearly everyone who itemizes. One giving strategy escapes them, because it never depended on a charitable deduction in the first place.
A Qualified Charitable Distribution (QCD) allows you to donate directly from your IRA to a qualified charity once you reach age 70½.
Instead of taking an IRA distribution, paying tax on it, and then writing a check to charity, the money goes directly from your IRA to the charity. Because the distribution is excluded from your taxable income, a QCD can be much more valuable than a regular charitable donation.
A QCD can also satisfy all or part of your Required Minimum Distribution (RMD). Note that these two ages no longer line up. QCD eligibility begins the day you actually turn 70½ (not January 1 of that year), while your first RMD is not due until age 73, or 75 if you were born in 1960 or later (SECURE 2.0). That leaves a window of several years in which you can make QCDs before any RMD applies, and it is often the best time to start.
Many people assume they get the same tax benefit whether they donate from their IRA or simply write a check. In many cases, that is no longer true, especially beginning in 2026.
This is the biggest advantage.
When you take an RMD and then donate the money, the RMD is still included in your income. A charitable deduction may help, but only if you qualify and itemize deductions.
With a QCD, the distribution is never treated as taxable income in the first place.
A lower AGI can:
This is one of the most overlooked benefits.
The amount of your Social Security benefits that is taxable depends partly on your other income. When RMD income increases your AGI, more of your Social Security benefits can become taxable.
Because a QCD keeps IRA distributions out of your taxable income, it may reduce the amount of Social Security that is subject to tax.
For many retirees, this hidden benefit can make a QCD more valuable than a traditional charitable deduction.
Beginning in 2026, charitable deductions may be less valuable for some taxpayers due to changes under the One Big Beautiful Bill Act (OBBBA), including:
A QCD avoids these limitations by reducing income directly rather than relying on a charitable deduction.
OBBBA did add something for non-itemizers: beginning in 2026, you can deduct up to $1,000 ($2,000 married filing jointly) in cash gifts to public charities while still taking the standard deduction. It is a real benefit, but it is not a substitute for a QCD. It does not reduce your AGI, so it does nothing for your Medicare premiums or the taxability of your Social Security, and gifts to donor-advised funds do not qualify.
To qualify:
This one catches working retirees, and it stays invisible until the return is prepared.
Since the SECURE Act removed the age cap on IRA contributions, you can keep funding a traditional IRA as long as you have earned income. But if you deduct those contributions for the year you turn 70½ or any year after, the tax-free portion of your QCDs is reduced dollar for dollar by the cumulative total (IRC §408(d)(8)(A)).
Deduct $7,000 at age 71, then make a $20,000 QCD: only $13,000 is excluded. The other $7,000 is taxable income, deductible on Schedule A if you itemize, which is exactly the outcome the QCD was meant to avoid. The offset is cumulative and permanent, carrying forward until it is fully absorbed. If you are still working and still contributing, this needs to be modeled before you give, not after.
If you plan to use a QCD to satisfy your RMD, make the QCD before taking other IRA withdrawals. RMDs follow a first-dollars-out rule: the first money to leave the IRA in a calendar year is treated as the RMD. Once a taxable withdrawal has been taken, no subsequent QCD can retroactively convert it.
For example:
If you take your RMD first and make the charitable gift later, the RMD will typically remain taxable. Practically, that means starting the paperwork in the fall. Custodians need lead time, and a check that clears on January 2 counts for the wrong year.
A QCD may not be ideal if:
Most of the QCD conversations we have at KMAF are not with clients who need the deduction. They are with clients whose AGI is causing issues elsewhere on the return.
For a high-income retiree, the 2026 rules stack against the deduction from three directions at once: the 0.5% floor takes the first slice, the 35% cap trims what is left for anyone in the top bracket, and neither one does anything about the AGI-driven costs sitting underneath. Those are the IRMAA surcharge, the share of Social Security benefits included in taxable income, and the 3.8% net investment income tax threshold. A deduction arrives too late in the calculation to help with any of them. A QCD never lets the income into the calculation at all.
That distinction gets sharper the closer a client sits to a threshold. IRMAA in particular is a cliff: a retiree who lands one dollar over the 2026 line pays the full next tier for twelve months, and because of the two-year lookback, they find out about it long after the year is closed, and nothing can be changed. A QCD made in time is one of the few tools that reliably keeps someone under that line, and it only surfaces if someone is looking at the return and the Medicare bracket together.
The clients we most often have to slow down are the ones still working part-time and still funding an IRA. For them, the post-70½ offset above is not a footnote. It can quietly consume the whole benefit.
For charitable retirees, a QCD is often one of the most effective tax-saving strategies available. Unlike a regular charitable contribution, a QCD reduces your AGI, may lower taxes on Social Security benefits, can help control Medicare premiums, and satisfies RMD requirements at the same time.
With charitable deduction limitations becoming more restrictive in 2026, many taxpayers may find that a QCD provides a larger overall tax benefit than simply taking an RMD and writing a check to charity.
If you are over 70½ and you give to charity, three things are worth doing now rather than in December: confirm which of your accounts is actually QCD-eligible, tell your custodian before you take any other distribution this year, and check whether any deductible IRA contribution you have made since 70½ is sitting against your exclusion.
We have put together a year-end QCD checklist covering custodian lead times, the acknowledgment language charities need to provide, and how the distribution should appear on your Form 1099-R and your return. Email us, and we will send it. If you would rather walk through your own numbers, contact our office to schedule a consultation. Bring your most recent Form 1099-R and your Medicare premium notice.
Sources: IRS Notice 2025-67, 2026 Amounts Relating to Retirement Plans and IRAs (QCD limit $111,000, split-interest election $55,000); IRS, Seniors can reduce their tax burden by donating to charity through their IRA; IRS Publication 526, Charitable Contributions; Congressional Research Service, Qualified Charitable Distributions from Individual Retirement Accounts (IF11377); IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs); P.L. 119-21 (One Big Beautiful Bill Act), covering the 0.5% AGI floor, the 35% itemized deduction cap and the IRC §170(p) non-itemizer deduction; IRC §408(d)(8)(A) and SECURE Act §107 (post-70½ contribution offset); SECURE 2.0 Act §107 (RMD ages 73 and 75); CMS, 2026 Medicare Parts A & B Premiums and Deductibles (IRMAA thresholds); 42 U.S.C. §1395r(i) (IRMAA two-year lookback).
This article is provided for general informational purposes only and does not constitute tax, legal, or accounting advice. It should not be relied upon as a substitute for consultation with a qualified professional regarding your specific circumstances and was prepared by KMAF with the assistance of AI-powered editing tools.
