Giving Straight From the IRA: Qualified Charitable Distributions in Palm Beach County

Plenty of retirees in Palm Beach County give generously to local hospitals, houses of worship, and arts organizations. Far fewer give in the most tax-efficient way available to them. A qualified charitable distribution (QCD) lets an IRA owner send money directly to a charity without that money ever counting as income. For charitably minded retirees, the gap between writing a check and making a QCD can be surprisingly large, and it is worth reviewing with experienced Palm Beach County estate planning attorneys.

How a QCD Actually Works

The rule comes from 26 U.S.C. § 408(d)(8). If you are at least 70½, you can direct your IRA custodian to transfer funds straight to a qualifying charity, and the transfer is excluded from your gross income. According to the Congressional Research Service, the 2026 limit is $111,000 per person, and each spouse can use a separate limit if both have IRAs.

A QCD also counts toward your required minimum distribution. Many retirees take RMDs they do not need, pay tax on them, and then donate part anyway. A QCD skips the middle step.

Why 2026 Makes the Math More Interesting

Federal changes that took effect this year altered how itemized charitable deductions work. Itemizers now face a floor equal to 0.5 percent of adjusted gross income before charitable gifts count, and top earners face a cap on the value of the deduction. A QCD sidesteps both issues because it never enters income in the first place.

Lower adjusted gross income can also reduce how much of your Social Security is taxed and help keep income-based Medicare premium surcharges in check.

The Rules That Trip People Up

QCDs are simple in concept and unforgiving in execution. A few details deserve attention:

• The money must go directly from the IRA to the charity. If you withdraw it first and then donate, it is not a QCD.
• Donor-advised funds and private foundations are not eligible recipients.
• QCDs come from IRAs, not 401(k)s or other workplace plans, unless those funds are rolled into an IRA first.
• You cannot receive anything in return, such as gala tickets or a dinner.
• Deductible IRA contributions made after age 70½ can reduce the amount you may exclude.
• Your custodian’s tax form will not label the transfer as a QCD, so you need to report it correctly and keep the charity’s written acknowledgment.

Timing matters too. An IRA check that the charity cashes in January may land in the wrong tax year.

Where QCDs Fit in an Estate Plan

A QCD is more than an annual tax move. Traditional IRA dollars are often the least efficient asset to leave to children, because most non-spouse beneficiaries must empty an inherited IRA within ten years and pay income tax along the way. Charities pay no income tax at all. That is why many families use QCDs during life and also name charities as IRA beneficiaries, while leaving assets that may receive a step-up in basis, such as appreciated stock or real estate, to family.

Let’s Make Your Generosity Work Harder

If charity is already part of your retirement, we can help you structure it so both your heirs and your favorite causes come out ahead. At Kitroser Lewis & Mighdoll, we look at how your IRA, your Will or trust, and your charitable goals fit together as one plan. Call us at 561-721-0600 to schedule a consultation with our North Palm Beach team.

Source:

law.cornell.edu/uscode/text/26/408 https://www.congress.gov/crs-product/IF11377