QCD or Cash Gift?: the facts

1. A qualified charitable distribution is a transfer from an IRA directly to a public charity by someone 70½ or older. It is excluded from income entirely; for 2026 the limit is $111,000 per person, indexed, with a one-time $55,000 election for a charitable gift annuity or remainder trust.
2. A cash gift of the same size, paid from a taxable IRA withdrawal, adds the withdrawal to adjusted gross income and is deductible only by itemizing; most retirees take the standard deduction ($32,200 joint for 2026), so the gift is not deducted at all.
3. Adjusted gross income does more than set the bracket. It sets how much of Social Security is taxable (thresholds of $32,000 and $44,000 joint), the senior deduction's phase-out (from $150,000 joint), and the Medicare tier two years out (first surcharge above $218,000 joint). A QCD lowers all of them at once.
4. Example: a couple with $80,000 of other income and $36,000 of benefits gives $10,000. From an IRA withdrawal, federal tax is $7,076; as a QCD, $5,876: $1,200 saved, $0 of benefits kept out of income.
5. A QCD counts toward the year's required minimum distribution, so a required withdrawal that would otherwise be taxed can go to charity untaxed instead.
6. Deductible IRA contributions made after 70½ reduce the excludable amount of later QCDs dollar for dollar (§ 408(d)(8)(A)); a donor-advised fund and a private foundation are not eligible recipients.

Educational only, not investment, tax, or legal advice. Results are hypothetical estimates that vary with each use and over time and are not guaranteed accurate or complete. Using this tool creates no client relationship with Considerate Capital, and the site that linked here is not affiliated with it. By using it you agree to the tool terms.