If you are age 70½ or older and regularly give to your church from your checking account, you may be paying federal income tax on money that could have gone directly from your IRA to the ministry you support.
A qualified charitable distribution, commonly called a QCD, allows an eligible IRA owner to direct the IRA custodian to send money directly to an eligible charitable organization. When the requirements are met, the portion of the distribution that would otherwise be taxable is generally excluded from gross income.
That distinction matters.
A QCD is not simply another charitable deduction. Instead, the qualifying distribution generally never enters your taxable income in the first place. For 2026, an eligible IRA owner may exclude up to $111,000 of qualified charitable distributions from gross income. A QCD may also count toward the owner’s required minimum distribution for the year.
Consider two retirees who each give $10,000 to their church.
The first takes a taxable $10,000 distribution from an IRA, deposits it into a checking account, and then writes a $10,000 check to the church. The second directs the IRA custodian to send the same $10,000 directly to the church as a qualified charitable distribution.
The church receives the same amount in both cases. The difference is how the gift is reported for tax purposes.
For retirees who claim the standard deduction, a charitable gift made from a checking account may provide only a limited additional federal tax benefit. Beginning in 2026, taxpayers who do not itemize may be able to deduct up to $1,000—or $2,000 for married couples filing jointly—for qualifying cash or check contributions. However, that deduction is applied when calculating taxable income and does not reduce adjusted gross income in the same way that excluding a qualifying IRA distribution may.
Why does adjusted gross income matter?
The amount of Social Security benefits subject to federal income tax is determined using a calculation that includes adjusted gross income. Medicare also uses modified adjusted gross income from a prior tax return when determining whether income-related surcharges apply to Part B and Part D premiums. As a result, keeping a qualifying IRA distribution out of income may, depending on the rest of your tax situation, affect more than your federal income tax bill.
The benefit is not automatic, and the rules matter.
You must be at least age 70½ when the distribution is made. The payment must come directly from an eligible IRA and be made payable to an eligible charitable organization. The funds cannot first be distributed to you and then donated. Ongoing SEP and SIMPLE IRAs are generally excluded, and you cannot also claim a charitable deduction for the portion of a QCD that was excluded from income. You should also obtain the appropriate written acknowledgment from the charity.
Timing matters as well. A taxable IRA distribution that has already been paid to you cannot later be reclassified as a qualified charitable distribution. The strategy should be reviewed and arranged before the money moves.
Generosity should never be reduced to a tax strategy. But good stewardship includes understanding whether the same gift can be made more wisely. A qualified charitable distribution does not change the church you support, the ministry your gift advances, or the generosity behind it. It simply changes the path the money takes—and that path may allow you to reduce unnecessary taxes while preserving more of your resources for future giving, family, and the purposes God has placed on your heart.
At Inspire Advisors Northwest Group, we help charitably inclined retirees coordinate their giving with required minimum distributions, IRA withdrawal strategies, and their broader financial and tax plans. Before making your next significant church contribution or taking your next IRA distribution, contact Inspire Advisors Northwest Group for a confidential review. We will help you evaluate whether a qualified charitable distribution is appropriate, coordinate the strategy with your tax professional and IRA custodian, and make sure the details are addressed before the funds are transferred.
If you want us to look at your portfolio, schedule a brief call: