Beyond Writing a Check

Written by Thomas DiCesare - Partner, Wealth Advisor at Waverly Advisors, LLC on July 6, 2026

Understanding Qualified Charitable Distributions (QCD)

Many retirees support charitable organizations through annual donations, fundraising events, religious institutions, or causes that are important to their families. For most people, charitable giving is straightforward: write a check, make an online contribution, or donate appreciated investments.

However, for individuals who own traditional Individual Retirement Accounts (IRAs), there may be another option worth considering. A Qualified Charitable Distribution (QCD) allows eligible individuals to make charitable gifts directly from their IRA while potentially receiving favorable tax treatment.

For retirees who regularly support charitable causes, a QCD may provide an opportunity to align charitable giving with retirement income planning and tax considerations. While not appropriate for every situation, it is a strategy that many charitably inclined retirees may wish to explore.

What Is a Qualified Charitable Distribution?

A Qualified Charitable Distribution allows eligible individuals to transfer funds directly from a traditional IRA to a qualified charitable organization.

Unlike a typical IRA distribution, a properly executed QCD is generally excluded from taxable income. In addition, a QCD may satisfy all or a portion of an individual’s Required Minimum Distribution (RMD), when applicable.

Several requirements generally apply:

The IRA owner must meet the age requirement established under current tax law.
The distribution must be made directly from the IRA custodian to the qualified charity.
Annual QCD limits apply.
The receiving organization must qualify as an eligible charitable organization under IRS rules.
Proper documentation and reporting requirements must be followed.

Although these rules are relatively straightforward, the distribution must be handled correctly in order to receive favorable tax treatment.

Why Some Retirees Consider QCDs

For individuals who already make charitable gifts each year, a QCD may provide several potential advantages.

One of the primary benefits is that the distribution is generally excluded from taxable income rather than being reported as income and potentially offset by a charitable deduction. Depending on an individual’s circumstances, this distinction may create planning opportunities that extend beyond simply supporting a charitable cause.

A lower adjusted gross income (AGI) may affect several areas of retirement planning, including:

Medicare premium calculations
Taxation of Social Security benefits
Certain income-based deductions, credits, or thresholds
Overall retirement cash flow planning

Beginning in 2026, because Qualified Charitable Distributions do not count as an itemized deduction, they generally avoid the new limitations on charitable contributions and itemized deductions. As a result, they may further reduce tax liability compared to a charitable contribution claimed as an itemized deduction.

In addition, some retirees no longer itemize deductions. For those individuals, a Qualified Charitable Distribution may provide tax benefits that are not available through traditional charitable contributions.

For individuals who already intend to make charitable gifts, these potential advantages are often what make QCDs attractive.

A Hypothetical Example

Consider a retired couple, both age 75, who regularly contribute $12,000 annually to several charitable organizations.

They also own a traditional IRA and have begun taking Required Minimum Distributions.

Historically, they would take their annual distribution, deposit the funds into their bank account, and then write checks to the charities they support.

After discussing their situation with their planning and tax professionals, they decide to direct a portion of their IRA distribution directly to the charitable organizations through a Qualified Charitable Distribution.

As a result, they are able to support the same causes they care about while integrating their charitable giving with their retirement distribution strategy.

Although every situation is different, this example illustrates how a QCD may help align charitable intentions with broader retirement and tax-planning considerations.

Questions Worth Asking

If charitable giving is already part of your financial life, a Qualified Charitable Distribution may be worth discussing with your planning team.

Consider the following questions:

Do you regularly support charitable organizations?
Do you own traditional IRA assets?
Are you currently taking, or will you soon be taking, Required Minimum Distributions?
Are you looking for ways to manage taxable income during retirement?
Would you like to coordinate charitable giving with other financial planning decisions?

The answers to these questions may help determine whether a QCD is appropriate for your situation.

Final Thoughts

Many retirees view charitable giving and retirement planning as two separate decisions. Qualified Charitable Distributions offer an example of how those goals may sometimes work together.

For individuals who are already committed to supporting charitable causes, a QCD may provide a straightforward way to integrate charitable giving with retirement income and tax planning. While not every strategy is appropriate for every investor, understanding the available options can help support more informed financial decisions.

Sometimes the most effective charitable giving strategy is not about giving more. It may simply be about giving differently.

If you would like more information about the terms and strategies discussed in this guide, or if you’re ready to explore how they apply to your specific situation, contact Waverly Advisors. With experience working with individuals, families, and executives managing significant wealth, we specialize in creating tailored strategies with the goal to help you grow, protect, and transfer your assets effectively.

MEET THE AUTHOR

Thomas DiCesare

Partner, Wealth Advisor

Thomas is a Partner and Wealth Advisor at Waverly Advisors. He has been with the firm since December 2022, when Wall Advisors, LLC merged with Waverly. Thomas was born and raised in Lakeland where he graduated from Lakeland Christian School. He went on to attend Georgia Southern University where he obtained a bachelor’s degree in accounting. While other students enjoyed summers off, Thomas interned with Wall Titus to get real-world accounting experience…Learn More

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