A qualified charitable distribution, usually shortened to QCD, is generally a nontaxable distribution made directly by the trustee of an IRA to an organization eligible to receive tax-deductible contributions, and the account owner must be at least age 70½ when the distribution is made (IRS, Publication 590-B (2025)). The mechanism is exclusion rather than deduction: the money never enters gross income, so no itemising is required and no charitable deduction is claimed for it.
The Statutory Definition, and Its Four Separate Conditions
The Code builds the term from conditions that sit in different subparagraphs, and all of them have to hold.
What it is. A qualified charitable distribution means any distribution from an individual retirement plan, other than a plan described in subsection (k) or (p), which is made directly by the trustee to an organization described in section 170(b)(1)(A), other than any organization described in section 509(a)(3) or any fund or account described in section 4966(d)(2), and which is made on or after the date that the individual for whose benefit the plan is maintained has attained age 70½ (26 U.S.C. 408(d)(8)(B)). The two exclusions in the middle of that sentence are made by cross-reference rather than by name, so the classes they remove are settled in sections 509(a)(3) and 4966(d)(2) and not in this paragraph.
Only the taxable part counts. A distribution is treated as a qualified charitable distribution only to the extent that the distribution would be includible in gross income without regard to subparagraph (A) (26 U.S.C. 408(d)(8)(B)). The publication says the same thing from the practitioner’s side: the amount of the QCD is limited to the amount of the distribution that would otherwise be included in income, and if the IRA includes nondeductible contributions, the distribution is first considered to be paid out of otherwise taxable income (IRS, Publication 590-B (2025)).
The gift has to be otherwise deductible. A distribution to such an organization is treated as a qualified charitable distribution only if a deduction for the entire distribution would be allowable under section 170, determined without regard to subsection (b) of that section and without regard to this paragraph (26 U.S.C. 408(d)(8)(C)). The word is entire, so a payment that buys the donor anything of value fails the test rather than splitting.
Section 72 is switched off for the measurement. Notwithstanding section 72, in determining the extent to which a distribution is a qualified charitable distribution, the entire amount of the distribution is treated as includible in gross income without regard to subparagraph (A) to the extent it does not exceed the aggregate amount which would have been so includible if all amounts in all individual retirement plans of the individual were distributed during that taxable year and all such plans were treated as 1 contract for purposes of section 72 (26 U.S.C. 408(d)(8)(D)). That is the reason the pro rata basis rule does not dilute a QCD the way it dilutes an ordinary distribution.
A source difference worth noticing rather than smoothing over: the statute excludes “a plan described in subsection (k) or (p)” flatly, while the publication describes the same carve-out as “other than an ongoing SEP or SIMPLE IRA” (IRS, Publication 590-B (2025)). The publication’s qualifier is not in the statutory words quoted above.
The Annual Cap, and the Figure Changed Between Years
The statutory figure is $100,000, and it is indexed. In the case of any taxable year beginning after 2023, each of the dollar amounts in subparagraphs (A) and (F) is increased by that dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2022 for calendar year 2016, and any increased amount that is not a multiple of $1,000 is rounded to the nearest multiple of $1,000 (26 U.S.C. 408(d)(8)(G)).
So the operative number moves every year and is never the one the statute prints. The IRS publication gives two of them, and they are different:
- The maximum annual exclusion for QCDs is $108,000, any QCD in excess of that exclusion limit is included in income as any other distribution, and if you file a joint return your spouse can also have a QCD and exclude up to $108,000. That is the figure for the year the publication is written for, 2025 returns (IRS, Publication 590-B (2025)).
- The same publication’s illustrated 2026 adjustment worksheet instructs the filer to enter the total amounts of qualified charitable distributions made during the current year, not to exceed $111,000 (IRS, Publication 590-B (2025)).
The joint-return point is per spouse rather than per couple, and it belongs to the spouse who owns the IRA, since the distribution has to come from that individual’s plan.
The Deduction Offset Nobody Expects
A taxpayer who kept making deductible IRA contributions after 70½ does not get the full exclusion. The amount of distributions not includible in gross income by reason of the exclusion sentence, determined without regard to the reduction sentence, is reduced, but not below zero, by an amount equal to the excess of the aggregate amount of deductions allowed to the taxpayer under section 219 for all taxable years ending on or after the date the taxpayer attains age 70½, over the aggregate amount of reductions under that sentence for all taxable years preceding the current taxable year (26 U.S.C. 408(d)(8)(A)).
Both halves of that subtraction matter. The first is cumulative across every year from 70½ onward, so it does not reset. The second stops the same deduction reducing more than one year’s exclusion. The publication runs it as a worksheet, and its illustration produces an excludable QCD of $2,500 from a $6,500 distribution where $4,000 of post-70½ deductions had not yet been absorbed (IRS, Publication 590-B (2025)).
The One-Time Split-Interest Election
There is a second, narrower route with its own cap and its own conditions. A taxpayer may elect for a taxable year to treat a distribution from an individual retirement account made directly by the trustee to a split-interest entity as meeting the direct-to-charity requirement, but only if an election is not in effect under that subparagraph for a preceding taxable year, the aggregate amount of distributions with respect to which the election is made does not exceed $50,000, and the distribution meets the requirements of clauses (iii) and (iv) (26 U.S.C. 408(d)(8)(F)(i)). Three conditions, and the election is available once in a lifetime rather than once a year.
A split-interest entity is a charitable remainder annuity trust as defined in section 664(d)(1), a charitable remainder unitrust as defined in section 664(d)(2), or a charitable gift annuity as defined in section 501(m)(5), and each of the three carries the same trailing condition, that it be funded exclusively by qualified charitable distributions. The charitable gift annuity carries one more: it must commence fixed payments of 5 percent or greater not later than 1 year from the date of funding (26 U.S.C. 408(d)(8)(F)(ii)).
Clause (iv) then limits who may benefit, in two parts. No person may hold an income interest in the split-interest entity other than the individual for whose benefit the account is maintained, the spouse of that individual, or both, and the income interest must be nonassignable (26 U.S.C. 408(d)(8)(F)(iv)).
The indexed version of the $50,000 is in the publication: a one-time distribution of up to $54,000 to charities through a split-interest entity, for the year that publication is written for (IRS, Publication 590-B (2025)).
What a QCD Does to the RMD, and What It Does Not Do to the Deduction
A QCD will count towards the required minimum distribution (IRS, Publication 590-B (2025)). That is the practical reason the transaction exists, and the mechanics of the distribution it is satisfying are set out in required minimum distribution.
The ages do not match, and the gap is real. A QCD may be made on or after the date the individual has attained age 70½ (26 U.S.C. 408(d)(8)(B)), while an account owner generally must begin taking required minimum distributions starting with the year they reach age 73 (IRS, Retirement plan and IRA required minimum distributions FAQs). So there are years in which a QCD is available and no RMD is yet due.
The deduction side is closed off from both directions. Qualified charitable distributions which are not includible in gross income are not taken into account in determining the deduction under section 170 (26 U.S.C. 408(d)(8)(E)), and the publication states the same rule as a caution: you cannot claim a charitable contribution deduction for any QCD not included in your income (IRS, Publication 590-B (2025)). Excluding it and deducting it are alternatives, never both.
Substantiation Is Not Waived
The exclusion does not remove the paperwork. You must have the same type of acknowledgment of your contribution that you would need to claim a deduction for a charitable contribution (IRS, Publication 590-B (2025)), with the substantiation requirements set out in Publication 526.
Common Questions
Read off the conditions above, in the order a preparer meets them: the owner is at least 70½ on the date of the distribution, the plan is an individual retirement plan other than the excluded ones, the trustee pays the charity directly, the recipient is a section 170(b)(1)(A) organization that is not a supporting organization or a donor advised fund, the whole gift would be deductible under section 170, only the otherwise taxable portion qualifies, the year’s total sits under the indexed cap, the post-70½ deduction offset is applied, and the acknowledgment is on file.
The sources here do not answer that, and any answer depends on facts they do not contain. What they do establish is that the two are mutually exclusive on the same dollars (26 U.S.C. 408(d)(8)(E)), that the QCD route requires no itemising because the amount never enters gross income, and that it counts toward the required minimum distribution (IRS, Publication 590-B (2025)). Which is worth more to a particular taxpayer turns on their own return.
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