# What is a qualified charitable distribution? How a QCD works, and how retirees give from their IRA

*URL:* https://christianfinancialadvisors.com/resources/articles/qualified-charitable-distribution/
*Updated:* 2026-10-29T09:18:01+00:00

*By Bob Barber, Founder & Senior Wealth Advisor, Christian Financial Advisors®*

A qualified charitable distribution (QCD) is a gift sent directly from your IRA to a qualified charity, like your church. It stays out of your taxable income, can count toward your required distribution, and works whether or not you itemize.

You must be at least 70½ on the day of the transfer, and the 2026 limit is $111,000 per person.

At Christian Financial Advisors®, we have used this strategy in a big way with our clients for years. It is one of the biggest things we do. Most of the retirees we serve have a pension and Social Security, so they do not need their required distribution, and we send hundreds of thousands of dollars every year to charities this way. The rule itself is short. What matters more is how our clients actually run their giving through it.

## How Christian Financial Advisors uses QCDs: the giving you already do, moved to your IRA

This works best for clients whose pension and Social Security cover their living costs. My colleague Shawn Peters describes them as people with required distributions they [“really don’t need”](https://christianfinancialadvisors.com/podcast/year-end-charitable-gifting-ideas/), but which they still have to take.

Matthew Barrovecchio, one of the advisors on our team, explained the routine on our episode [3 Ways to Uncover ‘Free’ Money](https://christianfinancialadvisors.com/podcast/3-ways-to-uncover-free-money/): “I’ve worked with many individuals to simply redistribute in their budget that they’re giving.” Nothing new is given. The same giving moves to a different account.

Where is the “free money”? Matthew’s answer: “It’s in the tax savings.”

Here is what I tell clients about the cash that frees up. They keep giving, but now from the IRA, and they put the cash they used to give back into savings. It’s a wash, but you’re better off, because you’re saving so much on your tax.

Shawn walks through the arithmetic in [10 Non Cash Giving Ideas to Lower Taxes](https://christianfinancialadvisors.com/podcast/10-non-cash-giving-ideas-to-lower-taxes/). Take a $5,000 gift to your church.

Take it out, pay tax, then give
Give it as a QCD

Amount from your IRA
$5,000
$5,000

Left to give after tax, 20% bracket
$4,000
$5,000

Left to give after tax, 30% bracket
$3,500
$5,000

A $5,000 QCD skips the tax. The same $5,000 taken out as a withdrawal leaves $4,000 after tax in a 20% bracket, or $3,500 in a 30% bracket. This is an illustration, not a prediction, and your own numbers depend on your situation.

Shawn reads the same numbers this way: assume a tax bracket of 20% to 22%, or higher, and you are giving 20% to 22% more to your church by using a QCD instead of paying the cash. He makes the point in [Year End Charitable Gifting Ideas](https://christianfinancialadvisors.com/podcast/year-end-charitable-gifting-ideas/).

I emphasize one thing to clients who tithe. If you tithe to your church, give from your required distribution as your tithe. It makes so much sense, financially and tax wise.

### How a QCD gets made: the shopping list

1. **You send us the list.** Many of our clients hand us what is almost a little shopping list: we want this much to go to this charity, this much to go to this one.
2. **We send the money, never you.** Matthew tells people not to try this on their own, because a key piece of the IRS rule is “making sure that the check is payable not to the individual, but to the organization.” Your IRA custodian pays the charity directly. If you take the money out first and then write a check yourself, it is not a QCD.
3. **Annuities go to the annuity company.** If your IRA is held inside an annuity, the request goes to the annuity company, which handles QCDs on those accounts. We need your request by November 30 so everything is finished before December 31.
4. **Timing.** The official deadline is 31 December, but custodians set earlier deadlines so the paperwork and transactions finish by then. Our cut-off for 2026 is November 30, so we need your request by that date. Shawn’s rule of thumb for year-end gifts in general is that if you have not started the process by the cut-off, it is too late. It is a good rule to keep in mind for a QCD too.

## The rules in brief

These are general rules for 2026. Confirm how they apply to you with your tax preparer or CPA.

- **Who can make one.** You must be at least 70½ on the date of the distribution. Turning 70½ later in the year does not qualify. That age is different from the age when required distributions begin.
- **Which accounts.** A QCD comes from an IRA. A traditional IRA qualifies, and so does an inherited IRA if the beneficiary is at least 70½ on the day of the transfer. An inactive SEP or SIMPLE IRA qualifies only if no contributions were made for the current plan year, and a SIMPLE IRA must also have met its two-year holding period. A 401(k), 403(b), 457(b) or TSP cannot make a QCD unless the money is first rolled over to an IRA.
- **The annual limit.** The limit for 2026 is $111,000 per person. Each spouse has a separate limit from their own IRA, so a couple with eligible IRAs can give up to $222,000. Anything over the limit is a taxable distribution.
- **Direct payment.** Your IRA custodian pays the qualified charity directly. A check that comes to you first is not a QCD.
- **Your required distribution.** A QCD counts toward your required distribution for the year, but it is not limited to it, and you can make one before required distributions begin. Required distributions start at 73 or 75, depending on the year you were born.
- **No deduction on top.** The QCD works by leaving the gift out of your income, so you do not also take a charitable deduction for it, and the benefit works whether or not you itemize. Shawn’s caution in [2022 Year End Tax Strategies](https://christianfinancialadvisors.com/podcast/2022-year-end-tax-strategies/) is a good one: “you can’t also take the charitable deduction. So no double dipping.”
- **Paperwork.** Keep the charity’s written acknowledgment. Your tax preparer reports the QCD on your return.

One practical point came from Ryan Assunto of the National Christian Foundation when he joined me on [Charitable Giving Strategies Using Non Cash Assets](https://christianfinancialadvisors.com/podcast/charitable-giving-strategies-using-non-cash-assets/). Many people take their required distribution and then write checks to charity. Ryan said: “please reverse that scenario. Give from your RMD first, and then only take the portion of your RMD that you need to fund your lifestyle.”

### If your money is still in a 401(k)

A QCD comes only from an IRA. It’s got to be an IRA. If your savings sit in an old 401(k), a TSP or another employer plan, a tax-free direct rollover into an IRA comes first, and then the QCD. Talk with us and your CPA before you move any money.

## What a QCD cannot do, and what we recommend instead

A QCD cannot go to a donor-advised fund. You can’t do that with a donor-advised fund. You have to give it directly to the charity. It’s a weird rule, but it is the rule. A QCD cannot go to a Giving Fund at the National Christian Foundation, though it can go to an NCF Designated Fund, which supports one named charity, and it can fund a charitable gift annuity.

For giving you want to spread over several years, we recommend a donor-advised fund funded with other assets. We set these up through the [National Christian Foundation](https://www.ncfgiving.com), our partner for donor-advised funds and charitable gift annuities. I explain how the fund works in [Donor Advised Funds: Give More, Save More](https://christianfinancialadvisors.com/podcast/donor-advised-funds-give-more-save-more/), and we cover it in more detail [on its own page](https://christianfinancialadvisors.com/resources/articles/donor-advised-fund/).

A QCD gives during your life. For what is left at your death, you can name your giving fund as the beneficiary of your IRAs. In my own plan, 20% of my estate is set up to go to our family giving fund when my wife and I pass away, and my IRAs are part of that 20%. A client with $2 million in IRAs has done something similar, planning to leave all of it to a family giving fund. If you have inherited an IRA yourself, we walk through the rules for that separately.

## What the Bible says about giving from what you have saved

Matthew chose 1 Timothy 6:6-8 for the episode: “But godliness with contentment is great gain. For we brought nothing into the world, and we can take nothing out. If we have food and clothing, we will be content with these.” His point was that none of this is a get rich scheme. Tax-efficient giving is a small step that makes room for contentment and for more generosity toward the Lord’s work.

We put the order of things this way in our July 2025 Financial Bullet Points: “Seek the Lord’s Will on maximizing generosity and ask Him what He would have you do.”

I picture 2 Corinthians 9:6-7 as a ripple. The Bible says, “The person who sows generously will also reap generously,” and that we should give “not reluctantly or out of compulsion, since God loves a cheerful giver.” God gives to us, so we receive. When we turn around and give, others receive. That is what a QCD does with money you have already saved: it sends it on to the Kingdom.

## Talk to us about your giving this year

A QCD is the simplest way most retirees can give more without giving more, and we already do it for our clients every year. Send us a list of the churches and ministries you support, and we will help you set it up before our year-end cut-off.

[Talk to an Advisor](https://christianfinancialadvisors.com/services/planned-giving-services/)

## Frequently asked questions

### Does a QCD count toward my required minimum distribution?

Yes. A QCD counts toward your required distribution for the year, but it is not limited to it. You can also make one before required distributions begin, which happens at 73 or 75 depending on the year you were born. Your tax preparer can tell you how it fits your situation.

### Can I make a QCD from my 401(k)?

No. A QCD comes only from an IRA, so an employer plan such as a 401(k), 403(b) or TSP cannot make one. If your savings are still in an old employer plan, a tax-free direct rollover into an IRA comes first. Talk with us and your CPA before moving money.

### Can a QCD go to my church?

Generally yes, as long as your church is a qualified charity. Many of our clients give their tithe this way. The money must go from your IRA custodian to the church, never through you, and you and your tax preparer are responsible for confirming that the charity qualifies.

### Do I get a tax deduction for a QCD?

Not a separate one. The QCD works by leaving the gift out of your income, and it works whether or not you itemize. Because of that, you do not also take a charitable deduction for the same gift. Your tax preparer can show you the effect on your own return.

### How do I report a QCD on my tax return?

For the 2026 tax year, your 1099-R shows the full amount in box 1, and the IRS added code Y in box 7 to flag a QCD, though using that code is optional for 2026. On Form 1040, the full distribution goes on line 4a and zero goes on line 4b, with “QCD” noted. If you copy the 1099-R straight onto your return, you will pay tax on the gift, so give your preparer the charity’s written acknowledgment. Form 8606 may also be needed if your IRA holds after-tax money.

### Can I send a QCD to a donor-advised fund?

No. A QCD cannot go to a donor-advised fund, including a Giving Fund at the National Christian Foundation. It can go to an NCF Designated Fund, which supports one named charity, or fund a charitable gift annuity. For giving you want to spread over years, a [donor-advised fund funded with other assets](https://christianfinancialadvisors.com/resources/articles/donor-advised-fund/) is the better fit.

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