QCD Calculator: Give From Your IRA, or Give Cash or Stock?

Quick answer: QCD, cash or shares?

• 70½ or older and giving from an IRA? A QCD almost always wins. The gift never counts as income, so it saves tax even if you take the standard deduction, which about 9 in 10 filers did on 2024 returns (JCT, via CRS). It also keeps income down for Social Security taxation, the senior deduction and Medicare premiums, and it counts toward your RMD.
• Giving appreciated shares can win if you itemize anyway and have shares with a big gain that you'd otherwise sell this year. If you'd keep them for life, your heirs get a stepped-up basis and the gain disappears anyway, so a QCD plus keeping the shares usually comes out ahead.
• Cash is fine for small gifts if you don't itemize: from 2026 you can deduct up to $1,000 ($2,000 joint) of cash gifts without itemizing (IRS Topic 506). You can do that on top of a QCD.

Example: a married couple aged 74 and 72 with $50,000 of Social Security, a $30,000 pension, $5,000 of dividends and a $20,000 RMD give $10,000. Giving through a QCD instead of cash saves them $1,896 in 2026, mostly because a $10,000 smaller IRA withdrawal also makes less of their Social Security taxable.

Income is Social Security, a pension and the RMD. "Real cost" is the gift minus the tax it saves, compared with not giving. Your numbers depend on everything else on your return, so run the calculator.

What a QCD is, and who can make one

A qualified charitable distribution is money paid directly from your IRA to a charity. It's left out of your income entirely, up to the yearly limit, and because it's excluded you can't also deduct it (26 U.S.C. § 408(d)(8); Pub. 590-B). The rules:

• Age 70½ on the day of the gift. Not the RMD age (73), and not "the year you turn 70½".
• From an IRA only: traditional, rollover, inherited (if you're 70½), or a SEP or SIMPLE IRA no longer getting employer contributions. Not a 401(k), 403(b) or 457(b): roll the money to an IRA first.
• Paid straight to the charity by your IRA custodian. A check made out to you doesn't count.
• To a qualifying public charity. Not a donor-advised fund, a supporting organization or a private non-operating foundation.
• Nothing in return, not even a gala dinner, and a written acknowledgment from the charity, as for a deductible gift (IRS).

QCD limits for 2026 and 2027

The limit is $111,000 per person for 2026, up from $108,000 in 2025 (IRS Notice 2025-67). A married couple who are both 70½ can each give up to the limit from their own IRAs, $222,000 in all. Since 2024 the limit rises with inflation, rounded to the nearest $1,000. There's also a one-time option to put up to $55,000 (2026) into a charitable gift annuity or charitable remainder trust that pays you or your spouse; it counts toward the yearly limit.

The IRS publishes the 2027 limit with the other 2027 retirement figures, usually in November; Bloomberg Tax projects about $114,000, and $57,000 for the one-time gift (Taxgirl), but don't plan on more than $111,000 until it's announced. We'll update this page when it is. For the other 2027 numbers, see the 2027 IRA limits.

Why a QCD beats a cash gift in 2026

The basic reason: a QCD keeps the money out of your adjusted gross income (AGI), while a cash gift is deducted after AGI, if at all. Several 2026 changes make the gap bigger.

If you take the standard deduction

If you'd still take the standard deduction after giving, a cash gift saves nothing beyond the new below-the-line deduction of $1,000 ($2,000 joint). That deduction lowers taxable income but not AGI (§ 63(b)), and it doesn't cover gifts to donor-advised funds (IRS Pub. 6196). A QCD saves tax on the whole gift. In the example above, that's the whole story.

If you itemize: the new 0.5% floor

From 2026, only charitable gifts above 0.5% of your AGI are deductible (§ 170(b)(1)(I); Greenberg Traurig). At $130,000 of AGI, the first $650 of gifts each year is lost. A QCD isn't a deduction, so the floor never touches it, and it lowers the AGI the floor is based on. For a single 75-year-old itemizer giving $20,000 out of a $40,000 RMD, the QCD saves $1,598, partly because the lower income keeps her below the first Medicare IRMAA tier.

In the 37% bracket: the 2/37 cut

From 2026, itemized deductions of people in the 37% bracket are cut so they're worth about 35 cents on the dollar (§ 68). A QCD is an exclusion, so it still saves the full 37%. For a couple with about $1,100,000 of income giving $50,000 (no state tax), the QCD saves $5,609 over a cash gift.

Income-driven costs a QCD avoids

• Social Security: each IRA dollar can make 50 or 85 cents of your benefits taxable (Pub. 915). See how Social Security is taxed.
• The senior deduction: the extra $6,000 per person aged 65+ (2025–2028) shrinks by 6% of income over $75,000 ($150,000 joint).
• Medicare premiums: income over an IRMAA line raises premiums two years later.
• The 3.8% net investment income tax above $200,000 ($250,000 joint), and the 7.5%-of-AGI floor for medical deductions.

QCD vs giving appreciated stock

Giving shares you've held more than a year lets you deduct their full market value (up to 30% of AGI) and never pay tax on the gain. That only matters if you itemize, and the gain only matters if you'd otherwise sell.

• You'd sell the shares this year anyway: a single 76-year-old itemizer giving $20,000 of shares that cost $4,000 would save $2,200 more by giving the shares than by a QCD, because giving them avoids the capital gains tax on the sale. See the capital gains tax on selling the shares instead.
• You'd keep the shares: the same person saves $411 with a QCD instead. The gain would disappear at death anyway, when heirs get a stepped-up basis.
• Doing both: use a QCD for the RMD, and give shares for anything above it, or to a donor-advised fund, which a QCD can't fund.

QCDs and your RMD

A QCD counts toward your IRA's required minimum distribution (Pub. 590-B), and it can be more than the RMD, up to the limit. Two catches: the first dollars out of an IRA each year count toward the RMD, so make the QCD before other withdrawals if you want it to cover the RMD; and a QCD can't satisfy an RMD from a 401(k). Work out how big your RMD is, and the RMD deadlines and the April 1 rule (a QCD counts for the year it's paid, so it must be made by December 31 to count for this year).

QCDs and Medicare premiums (IRMAA)

Medicare premiums are set by your income two years earlier, and going $1 over a line costs the whole surcharge, for each spouse on Medicare. A QCD lowers that income dollar for dollar, which makes it the simplest way to stay under a line. A single 74-year-old with $130,000 of income (pension, RMD and Social Security) giving $15,000 saves $1,190 of 2028 premiums with a QCD. Check the IRMAA tiers for 2028 premiums.

State taxes on QCDs

• Most states start from federal AGI, so a QCD is tax-free for state tax too; New York does, and Massachusetts adopted the exclusion (TIR 06-20). But if your state lets you deduct charitable gifts (Massachusetts does for everyone; California and many others for people who itemize there), a cash gift saves state tax too.
• Retirement exclusions shrink the state benefit: New York excludes $20,000 of pension and IRA income per person at 59½+, Georgia $65,000 per person at 65+ (both in the calculator), and several other states have partial exclusions.
• New Jersey doesn't follow the federal QCD exclusion, so the QCD is still NJ income, (Mullooly), though the NJ pension and retirement exclusion at 62+ with income up to $150,000 may shelter it (NJ GIT-1&2).
• Illinois, Pennsylvania, Mississippi and Iowa (55+) don't tax IRA withdrawals, so a QCD saves no state tax there.
• No income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.

How to make a QCD, step by step

1. Check you're 70½ on the day the money leaves the IRA, and that it's an IRA (roll 401(k) money over first).
2. Pick the charity and confirm it's a public charity, not a donor-advised fund or private foundation.
3. Ask your IRA custodian for a QCD: most have a form or online request, and some offer an IRA checkbook. The check must be payable to the charity.
4. Do it early, before other IRA withdrawals if it's covering your RMD, and by early December so it clears by December 31 (Kitces).
5. Get the charity's written acknowledgment showing the amount, the date and that you received nothing in return.
6. Report it on your tax return (below).

Reporting a QCD: Form 1099-R code Y and Form 1040

Your IRA custodian reports the whole distribution on Form 1099-R. A new distribution code Y marks QCDs, but it's optional for custodians for 2026 (IRS 1099-R instructions), so your form may not show it. On Form 1040, put the total on line 4a, the taxable part (zero if it was all QCD) on line 4b, and check the QCD box on line 4c (2025 form; the 2026 form isn't final). Keep the charity's acknowledgment. Don't deduct the QCD on Schedule A as well.

Common QCD mistakes

• Taking the RMD first and then making the QCD: it no longer reduces the RMD.
• Giving to a donor-advised fund or private foundation: not a QCD.
• Making it at 70, before the half-birthday.
• A check cashed in January for a December QCD: it may count for the wrong year.
• Deducting IRA contributions after 70½: they reduce how much of later QCDs is tax-free (Pub. 590-B). The calculator has a field for this.
• Using a 401(k), or a SEP or SIMPLE IRA still getting contributions.
• Counting it twice, as an exclusion and a deduction.

Common questions

What is the QCD limit for 2026?

$111,000 per person, plus a one-time $55,000 for a charitable gift annuity or remainder trust within that limit.

What will the QCD limit be in 2027?

The IRS hasn't announced it yet; it usually does in November. Bloomberg Tax projects about $114,000.

Is a QCD better than giving cash if I take the standard deduction?

Usually. If you'd still take the standard deduction after giving, a cash gift saves tax on at most $1,000 ($2,000 joint), while a QCD keeps the whole gift out of your income.

Can I deduct a QCD as well?

No. It's excluded from income instead, which is usually worth more.

Does a QCD count toward my RMD?

Yes, for IRA RMDs, if it's made before other withdrawals use up the RMD.

Can I make a QCD before 73?

Yes, from 70½. The RMD age rose to 73, but the QCD age didn't change.

Does a QCD lower my Medicare premiums?

It can: it lowers the income Medicare uses two years later, which can keep you under an IRMAA line.

Can a QCD go to a donor-advised fund?

No. Donor-advised funds, supporting organizations and private non-operating foundations don't qualify.

Can I make a QCD from a 401(k) or a Roth IRA?

Not from a 401(k): roll it to an IRA first. From a Roth IRA it's allowed but pointless, since qualified Roth withdrawals are already tax-free.

Can my spouse and I each give $111,000?

Yes, if you're both 70½ and each gives from your own IRA.

How do I report a QCD?

Line 4a for the total, line 4b for the taxable part, and the QCD box on line 4c. Your 1099-R may or may not show code Y.

Sources

1. 26 U.S. Code § 408(d)(8), Distributions for charitable purposes — Legal Information Institute, Cornell Law School. Accessed October 16, 2026.
2. Publication 590-B (2025), Distributions from IRAs — Internal Revenue Service. Accessed October 16, 2026.
3. Retirement plans FAQs regarding IRAs: distributions (withdrawals) — Internal Revenue Service. Accessed October 16, 2026.
4. Notice 2025-67 (2026 limits, including the QCD limit) — Internal Revenue Service. Accessed October 16, 2026.
5. Give more tax-free: eligible IRA owners can donate up to $105,000 to charity in 2024 (IR-2024-289) — Internal Revenue Service. Accessed October 16, 2026.
6. 26 U.S. Code § 170, Charitable contributions — Legal Information Institute, Cornell Law School. Accessed October 16, 2026.
7. 26 U.S. Code § 68, Overall limitation on itemized deductions — Legal Information Institute, Cornell Law School. Accessed October 16, 2026.
8. 26 U.S. Code § 63, Taxable income defined — Legal Information Institute, Cornell Law School. Accessed October 16, 2026.
9. Topic no. 506, Charitable contributions — Internal Revenue Service. Accessed October 16, 2026.
10. Publication 6196, charitable deduction changes — Internal Revenue Service. Accessed October 16, 2026.
11. Instructions for Forms 1099-R and 5498 (2026) — Internal Revenue Service. Accessed October 16, 2026.
12. Publication 915, Social Security and Equivalent Railroad Retirement Benefits — Internal Revenue Service. Accessed October 16, 2026.
13. Qualified Charitable Distributions from Individual Retirement Accounts (IRAs) (IF11377) — Congressional Research Service. Accessed October 16, 2026. January 15, 2026.
14. Qualified charitable distribution (QCD) rules and requirements — Kitces.com. Accessed October 16, 2026.
15. New limitations on charitable deductions take effect in 2026 — Greenberg Traurig. Accessed October 16, 2026. October 28, 2025.
16. TIR 06-20: The Pension Protection Act of 2006, charitable IRA distributions — Massachusetts Department of Revenue. Accessed October 16, 2026.
17. New Jersey tax on qualified charitable distributions — Mullooly. Accessed October 16, 2026. June 17, 2026. New Jersey's own guidance doesn't address QCDs.
18. GIT-1&2, Retirement income — New Jersey Division of Taxation. Accessed October 16, 2026.
19. Your first look at 2027 tax brackets, standard deduction amounts and more — Taxgirl. Accessed October 16, 2026. September 12, 2026; reports Bloomberg Tax projections.
20. Qualified charitable distributions: data for nonprofits — FreeWill. Accessed October 16, 2026. June 25, 2026.

Last checked October 16, 2026.