Tax Benefits of Qualified Charitable Distributions for 2026

Learn about the benefits of donating your Required Minimum Distribution (RMD) with a Qualified Charitable Distribution (QCD).

Chet & Elaine

Disclaimer: The information provided on this blog is for general informational purposes only and is not intended as legal, financial, or professional advice. While we strive to provide accurate and up-to-date content, the information may not be applicable to your specific situation or jurisdiction. Always seek the advice of a qualified professional, such as an attorney, accountant, or financial advisor, before making any significant financial, legal, or business decisions. The use of this blog’s content does not create a professional relationship between the reader and the author.

What you will learn

Tax Year 2026 QCD Summary: For the 2026 tax year, individuals aged 70½ or older can donate up to $111,000 directly from an IRA to qualified charities like Bello Machre. This Qualified Charitable Distribution (QCD) satisfies Required Minimum Distribution (RMD) obligations for those aged 73+ without increasing taxable income. In 2026, QCDs are more valuable than ever, as they bypass the new 0.5% Adjusted Gross Income (AGI) floor for itemized deductions while supporting Maryland disability services.

Qualified Charitable Distribution Guide

What is a Qualified Charitable Distribution (QCD)?

A Qualified Charitable Distribution (QCD) allows IRA owners aged 70½ or older to transfer up to $111,000 (for 2026) directly to a qualified 501(c)(3) nonprofit. This distribution counts toward your Required Minimum Distribution (RMD) but is excluded from your taxable income.

A QCD is a way to support your favorite charities directly from your IRA. When you make a QCD, you donate funds from your IRA to a qualified charity without incurring income taxes on the distribution. This can be an excellent strategy if you’re looking to satisfy all or part of your Required Minimum Distribution (RMD) without increasing your taxable income.

While a QCD doesn’t provide a charitable deduction, it does have a major tax advantage: you won’t owe taxes on the donated amount, making it a growingly popular choice for many donors.

To qualify, the distribution must go directly from your IRA administrator to the charity of your choice, like Bello Machre. Individuals aged 70½ or older can make QCDs up to $111,000 annually from their IRA. If both you and your spouse have separate IRAs, you can each make a QCD, potentially doubling the impact.

An IRA rollover, like a QCD, offers several tax advantages. By giving from pre-tax assets, you support causes you care about without affecting your tax bracket. This is especially valuable if you don’t itemize deductions or face limits on charitable deductions. By lowering your taxable income, an IRA rollover gift can help keep you within your current tax bracket and reduce potential tax burdens.

Qualified Charitable Distribution (QCD) Rules & Age

To qualify for a QCD:

  • You must be at least 70½ years old.
  • Donations can be directed to one or more qualified charities, specifically 501(c)(3) organizations eligible to receive tax-deductible contributions.
  • Report the QCD on IRS Form 1040 or Form 1040-SR.

IRS QCD Limits 2026

For 2026, the maximum Qualified Charitable Distribution amount is $111,000.

What Charities Qualify for QCD?

Charities that are recognized as 501(c)(3) organizations and eligible for tax to receive tax-deductible contributions. Bello Machre is one example of a qualifying organization.

“We are blessed to have this opportunity to give back to Bello Machre,” say parents Chet and Elaine. They explain, “Our son is a resident at one of Bello Machre’s group homes and receives Community Development Services, as well. We wanted to find a way to support Bello Machre that made the most sense for us.” While exploring options, Chet and Elaine learned about the opportunity to donate their Required Minimum Distribution (RMD).

“Giving from an IRA has always been an effective way to reduce your taxable income. Withdrawals to satisfy your RMD are taxed as income at your income level, but if you use your distribution (or part of your distribution) to make a gift to Bello Machre, you will not pay the income tax associated with the charitable portion,” explains Development Director Tracy Lynott. “Donating to a qualified charitable organization can help you meet your RMD while making a positive impact on your community!”

What are the 2026 RMD rules?

A Required Minimum Distribution (RMD) is the amount of money the IRS requires you to withdraw from tax-deferred retirement accounts each year. This includes Traditional IRAs, 401(k), and 403(b) plans. Because RMDs are taxed as ordinary income, they count toward your total taxable income for the year.

For 2026, the following rules apply:

  • Age Requirement: You must begin taking RMDs once you reach age 73.
  • Initial Deadline: If you turn 73 this year, you may delay your first distribution until April 1 of next year.
  • Annual Deadline: All subsequent distributions must be completed by December 31 of each year.
  • The Penalty: Failing to withdraw the full amount by the deadline results in a 25% excise tax on the shortfall. Under the SECURE 2.0 Act, this may be reduced to 10% if the error is corrected promptly within a specific two-year window.

How to set up your IRA charitable rollover

Many retirees choose to donate their Required Minimum Distribution (RMD) as a Qualified Charitable Distribution (QCD). While the IRS requires you to start withdrawing from your IRA at age 73, you can avoid paying taxes on the distribution by donating it directly to a charity you care about—this is known as an IRA charitable rollover.

Here’s how to set up your IRA charitable rollover:

  1. Contact your IRA administrator.
  2. Request that your RMD be sent directly to the nonprofit of your choice instead of to you personally, such as Bello Machre.
  3. Provide the charity’s full name, tax ID, contact person, and mailing address to your administrator.
  4. Inform the charity that a donation is on the way to help streamline the process.

Donating to Bello Machre

If you are a donor in Maryland looking to support local disability services, you can direct your QCD to Bello Machre. Provide your IRA administrator with the following details:

  • Organization Name: Bello Machre, Inc.
  • Address: 7765 Freetown Road, Glen Burnie, MD 21060
  • Tax ID: 52-0915574 
  • Contact: Tracy Lynott, Development Director

IRA RMD Table for 2026

To calculate your specific requirement, you can consult the IRS RMD Table. For the 2026 Tax Year, these figures help determine the minimum amount you must withdraw based on your age and account balance to avoid potential penalties.

Benefits of donating your RMD to charity

Choosing to donate your Required Minimum Distribution (RMD) as a Qualified Charitable Distribution (QCD) is a tax-smart way to support the causes you care about. For the 2026 tax year, you can direct up to $111,000 from your IRA to a qualified charity without that amount being added to your taxable income.

Donating your RMD provides several advantages in the current tax environment:

  • Income Exclusion: Because a QCD is excluded from your income rather than claimed as a deduction, it reduces your Adjusted Gross Income (AGI). This can help you stay in a lower tax bracket and may limit the impact on your Medicare premiums.
  • A Benefit for All Donors: You can take advantage of the tax benefits of a QCD regardless of whether you itemize your deductions or use the standard deduction.
  • Maximum Efficiency: In 2026, new rules have shifted how certain charitable deductions are calculated for those who itemize. Because a QCD bypasses these limits entirely, it remains one of the most effective tools for maximizing the impact of your charitable giving.

Examples of Satisfying Your RMD with a QCD

The following scenarios illustrate how a Qualified Charitable Distribution can help manage tax liability for the 2026 Tax Year:

  • Scenario 1: Partial RMD Satisfaction: If an annual RMD is $25,000 and a donor makes a $20,000 QCD, only the remaining $5,000 counts toward taxable income.
  • Scenario 2: Full RMD Satisfaction: If an annual RMD is $25,000 and a donor makes a $25,000 QCD, the entire requirement for the year is satisfied. The taxable income from this distribution becomes $0.
Scenario 1: Partial RMD Satisfaction outlined graphically.
Scenario 2: Full RMD Satisfaction outlined graphically.

Explore IRA Qualified Charitable Distributions

If you have an IRA and are interested in setting up a QCD, be sure to talk to a tax professional, first.

Get started at the Bello Machre planned gifts page

Donating your Required Minimum Distribution is one of many ways to support charities like Bello Machre. You can learn more about ways to give to Bello Machre, plus read inspiring stories from our donors when you visit our Planned Gifts page.

“Giving back to Bello Machre is the greatest feeling,” Chet and Elaine conclude. “If you can donate your RMD, you won’t regret it.”

IRA Charitable Rollover Gifts make an important impact on the people we support at Bello Machre! If you are of age, please consider giving back in this beneficial and meaningful way.

Learn More

Qualified Charitable Distribution & RMD FAQs

QCDs fulfill the RMD requirement for those aged 73 or older, helping to reduce your taxable income. Since RMDs are taxed as ordinary income, donating them as a QCD helps you avoid those taxes. By contributing to a charity rather than taking the RMD yourself, you not only save on taxes but also support charitable causes.

Yes, you can make a QCD from an inherited IRA if the beneficiary is 70½ or older. This option allows beneficiaries to continue supporting charitable causes while receiving tax benefits.

A charitable gift annuity (CGA) is a simple written agreement signed by you and our organization. Once you contribute cash from your IRA, the CGA begins to make monthly or quarterly payments to you for your lifetime. For the 2026 tax year, you can fund this agreement with a one-time distribution of up to $55,000. The payment rate is based on your age to your nearest birthday. Upon your passing, the annuity ceases and the remaining principal is used to further our mission.

Note: The minimum gift for funding a CGA through Bello Machre is $25,000. The President/CEO may make exceptions to this minimum. The minimum age at which payments for life income beneficiaries of a gift annuity shall be 65.

Here is an example:

  • $55,000 → CGA (lifetime income gift)
  • $56,000 → regular QCDs to charities
  • Total = $111,000 (max for the year)

Key 2026 Rules for this Election:

  • One-Time Limit: In 2026, the maximum amount for this one-time election has increased to $55,000 (up from previous years).
  • Once-in-a-Lifetime: This is a one-time opportunity. You cannot use this strategy in multiple tax years, even if you do not hit the full $55,000 limit the first time.
  • Minimum Payout: The annuity must have a payout rate of at least 5%.
  • Taxation of Payments: Unlike standard annuities, all payments you receive from a CGA funded by a QCD are taxed as ordinary income.
  • Beneficiaries: Payments can only be made to you, your spouse, or both. They cannot be directed to children or other beneficiaries.

If you’re looking to increase your retirement income while leaving a lasting impact on your chosen cause, a charitable gift annuity could be a worthwhile option. CGAs can provide income to you, your spouse, or both, and are backed by the full assets of the issuing organization.

However, keep in mind for the 2026 tax year, all payments received from a CGA funded by a QCD are taxed as ordinary income. We recommend consulting with your financial advisor to see how this guaranteed income stream fits into your overall 2026 tax planning.

Learn More About Bello Machre’s Disability Services

Services & Support for Developmentally Disabled
Contact Us

Disclaimer: The information provided on this blog is for general informational purposes only and is not intended as legal, financial, or professional advice. While we strive to provide accurate and up-to-date content, the information may not be applicable to your specific situation or jurisdiction. Always seek the advice of a qualified professional, such as an attorney, accountant, or financial advisor, before making any significant financial, legal, or business decisions. The use of this blog’s content does not create a professional relationship between the reader and the author.