QCD Rules 2026 — $108,000 Limit, IRMAA Fix, and Step-by-Step Custodian Process

The 2026 QCD limit and who qualifies

The 2026 QCD limit is approximately $108,000 per person per year. The limit was $105,000 in 2024 and is indexed annually for inflation under SECURE 2.0. Married couples can each contribute up to $108K from their own IRAs — the limit is per individual, not per household.

To qualify for QCD treatment, four conditions must be met:

1. You are age 70½ or older. The age is fixed at 70½ for QCDs even though the RMD age moved to 73 under SECURE 2.0. You can do QCDs between 70½ and 73 even though you don't yet have an RMD.
2. The IRA must be Traditional, SEP, or SIMPLE (inactive SEP/SIMPLE only). Roth IRAs technically qualify but the tax benefit is zero. 401(k)s and 403(b)s do NOT qualify — roll to an IRA first.
3. Distribution goes directly from the IRA custodian to the qualified charity. The check cannot pass through you. Some custodians allow a check made payable to the charity but sent to you to forward — that still qualifies because you are acting as agent, not as beneficial owner.
4. Recipient is a qualified 501(c)(3) public charity. Private foundations, donor-advised funds, and supporting organizations do NOT qualify for QCD treatment.

The IRMAA defense math

This is why QCDs are arguably the single most valuable retirement tax planning tool for charitable retirees.

The scenario: 75-year-old single filer with $1.5M Traditional IRA. RMD for the year is roughly $61,000. Without QCDs, that $61,000 lands on her 1040 as ordinary income. Combined with $30K Social Security and $20K pension, MAGI is $111,000 — well into the second IRMAA tier.

With QCD: She instructs her custodian to send $50,000 of the RMD directly to her church and the rest to her personally. Now only $11K shows up on her 1040 from the IRA. Total MAGI: $61,000 — below the first IRMAA bracket entirely.

If she repeats this strategy for 10 years and stays in the same brackets, total tax savings approach $165,000 — for charitable giving she was going to do anyway.

The traditional itemized-deduction route for charity (write the check personally, deduct on Schedule A) is strictly worse: the deduction only applies if your itemized deductions exceed the standard deduction ($14,600 single / $29,200 MFJ in 2024, indexed up for 2026). For most retirees, the standard deduction wins, and the charitable deduction provides zero benefit. The QCD bypasses this entirely because the money never enters AGI in the first place.

Step-by-step: how to actually execute a QCD

Every custodian's process is slightly different. Here are the four most common:

Fidelity

1. Log in to Fidelity.com
2. Go to Accounts & Trade > Transfer > Send Money
3. Choose "Send to a charity" (QCD-specific path)
4. Enter charity name, EIN, mailing address, and amount
5. Fidelity issues a check made payable to the charity and mails it; the distribution code is reported on 1099-R as a normal distribution but the QCD is reported by you (not Fidelity) on your 1040

Schwab

1. Call Schwab IRA services (800-435-4000) or use the IRA Distribution form online
2. Specify "QCD" in the special instructions
3. Provide charity name, EIN, mailing address
4. Schwab mails check directly to charity

Vanguard

1. Go to vanguard.com > My Accounts > IRA Distribution
2. Choose "Send check to a third party (charitable distribution)"
3. Enter charity details
4. Vanguard issues the check; you should receive a copy or notification

If your IRA is at a smaller custodian or bank

Call them. Ask: "Do you process Qualified Charitable Distributions, and what is your form?" Some smaller IRA custodians do not have a streamlined QCD process — in that case, consider moving the IRA to Fidelity or Schwab via direct trustee-to-trustee transfer before year-end. The transfer is not a taxable event.

Critical timing: The check must be cashed by the charity by December 31 to count for that tax year. Mail QCD requests by mid-November to be safe. Custodian processing + USPS delivery + charity deposit + check clearing can easily eat 4-6 weeks.

Reporting the QCD on your tax return

The IRA custodian does not flag QCDs as charitable on Form 1099-R. The 1099-R shows the full distribution amount in Box 1 with distribution code 7 (normal). You report the QCD on your tax return.

On Form 1040 (2024 version, similar for 2026):

• Line 4a (IRA distributions): full distribution amount
• Line 4b (taxable amount): full distribution minus the QCD amount
• Write "QCD" on the dotted line next to Line 4b

Example: $61,000 RMD with $50,000 sent as QCD = $61,000 on 4a, $11,000 on 4b, "QCD" written in margin.

Keep documentation: the IRA custodian's confirmation letter, the charity's written acknowledgment (required for any contribution over $250), and copies of the canceled checks.

Common QCD mistakes that void the tax benefit

1. Donor-advised fund (DAF)

DAFs do not qualify for QCD treatment. If you send your IRA RMD to a DAF (Fidelity Charitable, Schwab Charitable, Vanguard Charitable), the distribution counts as taxable income and the DAF contribution is treated as a normal Schedule A deduction.

2. Check sent to you first

If the check is made payable to YOU (not the charity), it's a normal taxable distribution. You then forwarding the money to the charity creates a Schedule A deduction event, not a QCD. The check must be made payable to the charity.

3. Receipt without acknowledgment

The charity must provide a written acknowledgment stating that no goods or services were received in exchange. For QCDs over $250, this is the same documentation required for any charitable deduction — but for QCDs, the documentation must be obtained before you file your tax return.

4. Doing the QCD after the RMD is already taken

QCDs only have RMD-offset value if done before the RMD is fully withdrawn. Once you've taken your full RMD in cash, a subsequent QCD doesn't reduce taxable income from that RMD — it just creates additional tax-free distribution capacity (which you may or may not need).

Always do QCDs first, then take the rest of the RMD in cash if needed.

5. Private foundation or supporting org

Only public 501(c)(3) charities qualify. Family foundations, supporting organizations described in §509(a)(3), and DAFs are all excluded.

The QCD-MYGA combination

For retirees who don't need IRA distributions for living expenses, the QCD strategy combines beautifully with a MYGA-laddered IRA:

1. Hold IRA money in MYGAs: Earn 5.5-5.8% guaranteed inside the tax-deferred IRA wrapper.
2. Use RMD-free MYGA structures: Most MYGA carriers allow penalty-free withdrawal of the RMD amount each year. Ask in writing before signing.
3. Use QCD for the entire RMD: Up to $108K/person/year. Charitable retirees often have RMDs in this range from $2-3M IRAs.
4. Reinvest unneeded MYGA growth: The QCD shelters the RMD from tax; the rest of the MYGA continues to grow tax-deferred for legacy or future use.

For a 75-year-old with $2.5M in IRA money and a strong charitable habit, this combination can reduce 10-year tax cost by $200K+ compared to taking RMDs in cash and donating from after-tax dollars.

Related reading

• IRMAA brackets 2026 explained
• Inherited IRA SECURE Act 10-year rule
• Roth conversion vs MYGA bucket
• Using IRA CDs to cover RMDs
• Best MYGA rates — 2026

Want my independent take on whether this fits your situation?

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Disclosure

This article is general educational information, not personalized financial, tax, or legal advice. All rates, IRS limits, Social Security PIA factors, IRMAA brackets, FDIC/NCUA coverage, and state guaranty fund coverage figures are current as of the publication date and subject to change. IRMAA brackets and Roth/Traditional IRA limits cited reflect IRS guidance for 2026 and may be updated by the IRS or SSA; confirm current figures at irs.gov and ssa.gov before acting. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated annuity carriers; he does not sell bank CDs, money market funds, or Treasury securities and is not affiliated with any bank, brokerage, or government agency discussed. No compensation has been received from any third party in connection with this article. Bank CDs are FDIC-insured deposit products; credit union share certificates are NCUA-insured; money market funds are SEC-regulated investment products with no FDIC coverage; Treasuries are direct obligations of the U.S. government; MYGAs are insurance contracts backed by carrier balance sheets and state guaranty associations. These are different product categories with different protections, tax treatments, and trade-offs. Always confirm current rates and tax law with the issuer or a CPA before acting.