Richard Pon CPA CFP*

Originally released on May 6, 2026, Republished with permission of the author

A qualified charitable distribution (aka QCD or The IRA Charitable Rollover ) exempts from taxable income any funds transferred (“rolled over”) from an Individual Retirement Account (IRA) to a charitable organization.

The following limitations apply:

• The donor must be age 70½ or older.
• The cap on annual IRA rollovers to charity is $111,000 (2026 year)
• The contribution must be a direct gift to a charity.

Can your organization be a recipient of the Charitable IRA rollover?

Yes, most 501(c)(3) organization eligible to receive charitable contributions, can be a recipient of the Charitable IRA rollover. However, donor advised funds, supporting organizations, and private foundations are not eligible charities.

How do donors contributing IRA assets to a charity benefit for Federal tax purposes?

Each donor should consult his or her own tax adviser but here are some benefits a donor may see:

• Your qualified charitable distributions (the Charitable IRA Rollover) can satisfy all or part the amount of your IRA required minimum distribution. For example, if your required minimum distribution was $15,000, and you made a $5,000 charitable IRA rollover, you will only need to withdraw another $10,000 to satisfy your required minimum distribution. The Charitable IRA Rollover counts towards your RMD but is NOT taxable income.
• If reporting additional income on your tax return may increase your Medicare Part B premiums or increases the taxability of your Social Security benefits, then making a charitable contribution from your IRA will be a way to avoid higher Medicare surcharges or tax on Social Security benefits.
• Starting 2026, taxpayers are limited on charitable contribution deductions based on their adjusted gross income as only contributions in excess of 0.5% of your adjusted gross income are tax deductible. By directing your IRA distribution to a charity, you can avoid this limitation and give more to charity.
• Starting 2026, taxpayers in the highest tax bracket will have their itemized deductions limited to a 35% tax savings, then making a charitable contribution from your IRA may be appropriate as no income is reported that may push you into the highest tax bracket.
• For taxpayers who claim the standard deduction, the IRA charitable rollover provision offers the tax benefits of a charitable contribution without you having to itemize your deductions.

Can donors contributing IRA assets to a charity claim a tax deduction?

No, because a contribution to a qualified charity is not taxed as income under the IRA Rollover provision, the donor cannot claim a tax deduction for that contribution.

What kind of retirement accounts can be utilized?

Distributions can only be made from traditional Individual Retirement Accounts or Roth IRAs. SEP-IRAs and Simple-IRAs are NOT eligible.

Charitable donations from 403(b) plans, 401(k) plans, pension plans, and other retirement plans are not eligible for the tax-free treatment.

Planning Tip: Generally, Roth IRA distributions are not taxable and not subject to RMD rules. Therefore, it would be better to use a regular IRA as your charitable IRA rollover.

Do charitable contributions from IRAs count toward your annual IRA required minimum distribution (RMD) requirement?

Yes, you can give your required distribution to a qualified charitable organization without having to count it in your taxable income and count it towards your RMD. For example, if your required minimum distribution was $15,000, and you made a $5,000 charitable IRA rollover, you will only need to withdraw another $10,000 to satisfy your required minimum distribution.

What are the substantiation/receipting requirements of the IRA Rollover provision?

In order to benefit from the tax-free treatment, you must obtain written substantiation of each IRA rollover contribution from each recipient charity.

In most instances, your IRA administrator will send your charitable donation in the form of a check directly to the recipient charity and is not likely to include your name with the contribution. In requesting the distribution by letter, you should ask your IRA administrator to include your name and contact information with the contribution.

Can a rollover gift be used to fund a gift where benefits are received?
No this is a big trap. The donor can receive no benefits in return for the gift. This includes tickets to an event such as a dinner. If a benefit is received, it does not qualify as a qualified charitable distribution.

Can My Spouse and I Both Take Advantage of the IRA Charitable Distribution?

Yes. The amount that can be excluded from income is limited to any amount up to $111,000 per taxpayer per year. As a married couple, you can together donate up to $222,000 provided that each of you own at least one IRA and have reached age 70.5.

Can I Still Make a Gift With an IRA Beneficiary Designation?

Whether or not you choose to make a charitable IRA rollover gift, you can still designate your favorite charity as an IRA beneficiary. This works wonders as charities do not pay taxes on inherited IRAs. In contrast, your friends and family have to pay taxes on inherited IRAs.

If I Made a Charitable IRA Rollover Gift in Other Tax Years, Can I Do This Again?

Yes. The charitable IRA rollover can be made each year.

Does Timing Matter?

Yes. If you withdraw your full RMD amount as a personal distribution early in the year, you have already met your RMD obligation with taxable income. If you then decide to do a QCD later in the year, that QCD will still be tax-free, but it will be in addition to the RMD you already took which would be taxable. You cannot retroactively “label” a previous taxable distribution as a QCD.

About the Author

Richard Pon CPA CFP provides tax planning, financial planning and management consulting services to a wide variety of nonprofit organizations (such as charities, schools, private foundations, and business leagues). He can be reached at richardponcpa.com.