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Qualified Charitable Distributions (QCDs): An Overview for 2026

Qualified Charitable Distributions (QCDs) are a provision in the tax code that allows eligible individuals to transfer funds directly from an Individual Retirement Account (IRA) to qualified charitable organizations. For many retirees, QCDs have become an important component of charitable giving and retirement income planning because of how they are treated for tax purposes.

This article provides a general overview of how QCDs work and highlights key updates that apply for the 2026 tax year.

What Is a Qualified Charitable Distribution?

A Qualified Charitable Distribution is a direct transfer of funds from an IRA to an eligible charity. To qualify:

     

      • The distribution must be made directly from the IRA custodian to the charitable organization

      • The IRA owner must be age 70½ or older at the time of the distribution

      • The distribution must otherwise be taxable if taken as income

    When structured properly, the amount transferred to charity is excluded from the taxpayer’s gross income.

    QCDs can also count toward satisfying required minimum distributions (RMDs) for the year, if applicable.

    Key Features of QCDs

    Some of the defining characteristics of QCDs include:

       

        • Direct transfer requirement: The funds must move directly from the IRA to the charity (not first to the account owner).

        • Eligible accounts: QCDs are typically made from traditional IRAs (not employer plans such as 401(k)s unless rolled into an IRA first).

        • Qualified charities only: Not all charitable vehicles are eligible—donor-advised funds, private foundations, and supporting organizations are generally excluded.

        • Exclusion from income: The distribution is not included in adjusted gross income (AGI), which can affect other tax calculations.

      2026 QCD Contribution Limits

      Under changes from recent legislation, QCD limits are now indexed for inflation. For the 2026 tax year:

         

          • The annual QCD limit is $111,000 per individual, up from $108,000 in 2025

          • Married couples filing jointly may each make QCDs up to that limit from their own IRAs

          • A one-time QCD of up to $55,000 may be used to fund certain split-interest charitable vehicles (such as charitable gift annuities or charitable remainder trusts), also adjusted for inflation

        These inflation adjustments are part of provisions introduced in the SECURE 2.0 Act, which indexed the QCD limit annually beginning in 2024.

        Interaction With Required Minimum Distributions

        For individuals subject to RMDs, QCDs can be used to satisfy all or part of the required distribution for the year.

        While the RMD age is currently 73 (and scheduled to rise to 75 in 2033), the eligibility age for QCDs remains 70½, allowing some individuals to make QCDs even before RMDs begin.

        New Reporting Rules

        A recent administrative update affects how QCDs are reported:

           

            • Beginning with tax year 2025 reporting (filed in 2026), IRA custodians are required to report QCDs using a specific distribution code on IRS Form 1099-R.

          This change is intended to improve reporting clarity and reduce the need for manual adjustments when preparing tax returns.

          Related Charitable Giving Changes for 2026

          While not specific to QCDs, broader charitable giving rules also changed in 2026 and may affect overall giving strategies:

             

              • Non-itemizers can now deduct up to $1,000 (single) or $2,000 (joint) for cash charitable contributions

              • A 0.5% of AGI floor applies to itemized charitable deductions

            These changes do not alter the core mechanics of QCDs but may influence how charitable giving is structured more broadly.

            Summary

            Qualified Charitable Distributions can play a meaningful role in how charitable giving, retirement income, and tax considerations intersect—but the rules and reporting requirements can be nuanced and continue to evolve.

            If you’re considering charitable giving from your IRA or simply want to understand how QCDs fit into your broader financial picture, now is a good time to have that conversation. **@************rs.com“>Connect with a financial advisor to review your situation, clarify how the current rules apply to you, and ensure everything is coordinated properly with your overall plan.

             

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            Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

            This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

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            Peter M. Babilla, CFP®, CRPS®

            PARTNER

            Peter Babilla brings 40 years of experience in investment management and fiduciary* financial consulting to Vertex Planning Partners, LLC.

            Pete graduated from Indiana University in Bloomington, Indiana with a Bachelor’s of Science in Finance.

            He began his career in 1983 with a focus on institutional fixed-income portfolio management, primarily working with community banks. After a decade serving institutional clients, Pete shifted his focus to working with individuals, families and business owners, providing guidance and education in all areas of Wealth Management.  Among his areas of focus are accumulation and retirement planning, investment management, risk management, and estate and wealth transfer.

            Pete’s planning philosophy allows him to create a personalized program for clients, based on their own unique goals and circumstances.  The extensive investment and planning platform offered by Vertex enables him to create a highly customized program, tailored to each individual client.

            Pete and his wife Suzanne have two children, and have resided in Wheaton, Illinois for the past 30 years.  He enjoys golf, reading, and traveling with his family.  Pete gives back as a past Board Member of the Epilepsy Foundation of Greater Chicago, where his focus is on improving the lives of those living with epilepsy.

            Pete works as fiduciary for his clients and holds the CERTIFIED FIANANCIAL PLANNER™ (CFP®) designation and the Chartered Retirement Plan Specialist (CRPS®) designation.

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            JUSTIN J. D'AGOSTINO, CFP®, TPCP®, ChFC®, CRPC®

            PARTNER

            Justin D’Agostino joined Vertex Partners in 2019 and serves a select group of business owners and affluent families. He specializes in investments, financial planning, and succession planning. His interest and knowledge in providing comprehensive financial planning and wealth management services to clients was sparked when he worked at a boutique tax and wealth management firm in Michigan. He has nine years of experience in the financial services industry, and his mission is to provide every client with targeted, comprehensive financial advice and to help them implement customized strategies designed to move them closer to accomplishing their unique goals.

            Justin attended Hillsdale College where he earned his BA in Accounting and Financial Management and was a member and captain of the football team. Justin is a CERTIFIED FINANCIAL PLANNER™ Professional, and holds the Tax Planning Certified Professional®, Chartered Financial Consultant® and Chartered Retirement Planning Counselor™ designations.

            Justin and his wife, Alexandra, reside in Chicago, Illinois. He is an avid sports fan and enjoys golfing, playing soccer and spending summer weekends with his family.

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            Scott A. Sandee CFP®, CIMA®, CPWA®, CEPA

            MANAGING PARTNER

            Scott Sandee brings over 20 years of experience as Managing Partner. He is responsible for leading the firm’s efforts in assisting middle-market business owners and seven and eight-figure families to plan and realize financial goals based on their unique aspirations and situations.

            With a privately held family business background, Scott has helped owners prepare for and execute a successful transition. In addition, he works with business owners and their advisors to develop financial strategies to maximize sales proceeds and minimize future taxes.

            Before joining Vertex, Scott served in financial planning and investment strategy roles at Oxford Financial Group, Capital Group, and The Northern Trust Company, working with Chicago’s HNW/UHNW families clients.

            Scott holds the Certified Financial Planner®, Certified Private Wealth Advisor®, Certified Investment Management Analyst®, and Certified Exit Planning Advisor designations. Scott earned his B.S. in Computer Science from Northern Illinois University, and his family resides in Wilmette, IL.

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            Julie Hupp CFP®, MBA

            PARTNER

            Julie Hupp, CERTIFIED FINANCIAL PLANNER™ professional, has worked in the accounting and corporate finance field since 1987. She began her career as a CPA with Deloitte & Touche, specializing in the financial needs of small businesses. Then spent the next 13 years in corporate financial planning and business development at Baxter and TAP Pharmaceuticals. Recognizing her passion for personal financial planning, Julie started her business in 2006 where she focuses on comprehensive financial planning strategies and implementation.

            Julie graduated from University of Illinois with a BS in Accountancy. She received her Master’s in Management with a concentration in Finance from Northwestern University’s Kellogg School of Management in 1994.

            Outside the office, Julie is the co-founder of the 12 Oaks Foundation, which has merged with Cal’s Angels, and is a former Board member. Julie enjoys cooking, reading, running, triathlons and doing almost anything outdoors. A great weekend is spending time with her husband and two adult kids boating at their lake house in Wisconsin.

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            Steven P. Franzen, CPA, PFS, CGMA

            MANAGING PARTNER

            Steven P. Franzen, CPA, PFS, CGMA is a public accountant and consultant with more than 23 years of experience helping individuals and businesses reduce their tax liability.  He began his career under the guidance of Patrick M. De Sio, CPA, CGMA and in 1996 became Mr. De Sio’s partner in De Sio, Franzen & Associates, Ltd. Steve’s expertise include entity design, complex tax strategies and multigenerational wealth transfer.  As Managing Partner, Steve conducts his practice under the philosophy that the client’s investment in their CPA should yield a return on that investment – most of the time that return is realized when working with clients on planning for their future. In an effort to increase the planning capabilities of the firm,  Steve formed Vertex Accounting Partners, LLC to ensure their guiding philosophy will continue well into the future.

            Steve is a certified public accountant and has earned the professional designations of Personal Financial Specialist and Chartered Global Management Accountant.  He is a member of the American Institute of Certified Public Accountants and the Illinois CPA Society.  Steve earned a B.S. degree in accounting from Millikin University.  He and his wife Kristie live in Sugar Grove, IL with their three children.

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            Gregory P. Benner, CPWA®, CFP®, CLU®, ChFC®, AIF®, RMA®

            MANAGING PARTNER

            Gregory P. Benner, CPWA®, CFP®, ChFC®, CLU®, AIF®, RMA® has over twenty-two years of experience as a financial advisor. Greg’s practice is based on developing holistic financial plans that help his clients integrate sophisticated retirement, tax, risk management and estate planning strategies into an actionable plan, then stay the course as their behavioral coach.

            Prior to founding Vertex Planning Partners, LLC, Greg spent four years as a founding partner of a Registered Investment Advisory firm affiliated with LPL Financial. He also spent seven years with JPMorgan Chase as a Senior Financial Advisor and was a Financial Representative with Northwestern Mutual Life.

            Greg holds the Certified Private Wealth Advisor® designation and is a CERTIFIED FINANCIAL PLANNER™ Certificant. He also holds the Chartered Financial Consultant®, Chartered Life Underwriter®, Accredited Investment Fiduciary™, and Retirement Management AdvisorSM designations. He earned a B.S. in Finance from Miami University and a Master of Science in Taxation (MST) from the University of Cincinnati.

            He and his wife Lindsey reside in Naperville, IL with their daughter and twin sons.

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            Michael D. Bellis, CFP®, CLU®

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            Michael D. Bellis, CFP®, CLU® began his career as a financial planning professional in 1994. His practice is centered on holistic financial planning, astute risk management strategies and empirical, research-driven portfolio construction. He began his career in partnership with his father under the name Bellis & Associates. Together, their practice and reputation for excellence dates back more than 40 years and includes multiple generations of the same families. After his father’s retirement several years ago, Mike continued to build a client-centric, consultative practice before forming Vertex.

            Mike holds the CERTIFIED FINANCIAL PLANNER™ certification and is also a Chartered Life Underwriter. He has been an active member of both the Society of Financial Services Professionals and the National Association of Insurance and Financial Advisors. He earned a B.S. in Business & Marketing from Illinois State University. Mike is a lifelong resident of Naperville, Illinois. He and his wife Tanja have three children.

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