The ABCs of RMDs and QCDs

Chris P. Barthe
Vice President and Wealth Planning Officer
Washington Trust Wealth Management

If you’re charitably inclined and staring down required minimum distributions (RMDs), a qualified charitable distribution (QCD) can be one of the cleanest ways to turn a tax obligation into impact. 

The Basics

A QCD allows you to transfer funds directly from an IRA to a qualified public charity once you’ve reached age 70½. For 2026, the QCD limit is $111,000 per person, or $222,000 for married couples filing jointly (assuming each spouse has an IRA and meets the age requirement). ⁱ

Amounts distributed as QCDs count toward your RMD for the year but are excluded from adjusted gross income (AGI). That exclusion is the entire point. Unlike a taxable RMD followed by a charitable deduction, a QCD keeps income off your return altogether, which is particularly attractive if you’re already hitting deduction ceilings or no longer itemizing at all.

The Draw for High-income Retirees

For many retirees, the standard deduction is already large enough that itemizing charitable gifts doesn’t move the needle. That’s even more true if you’re over 65 and eligible for an enhanced senior deduction. With an enhanced deduction, you may get no incremental tax benefit from itemizing at all. In that situation, a QCD shines because it delivers tax efficiency above the line, regardless of whether you itemize.

It reduces AGI dollar for dollar, which in turn can mitigate:

• IRMAA surcharges on Medicare premiums
• Taxation of Social Security benefits
• Phaseouts tied to AGI rather than taxable income

QCDs and DAFs

People often ask whether they should use QCDs or donor-advised funds (DAFs). In practice, they solve different problems and are complementary tools, not competitors, and often most effective when used together.

Think of QCDs as your “IRA spend-down” strategy. They’re ideal for larger recurring gifts once RMDs begin, because they move money out of a tax-deferred account in the most tax-efficient way possible. DAFs, by contrast, are great for bunching smaller or irregular donations, for pre-funding future giving during high-income years, or for involving family members in grantmaking over time.

One important rule to remember: QCDs cannot go to a DAF. That’s why pairing the two can work so well; QCDs handle your RMD-era giving, while DAFs handle everything else.

Timing Matters—Especially for Your First RMD  

You’re allowed to postpone your first RMD until April 1 of the year after you reach your starting age. That can be helpful if you retire late in the year or expect lower income shortly after. But there’s a catch. Postponing means you’ll take two RMDs in the same tax year: the delayed first one and the regular second one due by December 31.

If QCDs are part of your plan, that timing decision matters. Two RMDs in one year can push more income onto your return unless you offset them with QCDs made in that same calendar year. Planning ahead lets you decide whether to take the first RMD earlier or line up QCDs to smooth the tax impact.

Example: Using a QCD to Reduce Your Tax Liability

• Situation
  • You’re 73 years old and required to take $50,000 in RMDs from your Traditional IRA this year but don’t need the RMDs for living expenses.
  • Your current taxable income (excluding the RMD) is $450,000, putting you in the 35% federal tax bracket.
• Without a QCD
  • If you withdraw the $50,000 RMD and deposit it into a taxable account—even if you later donate it to charity—it’s fully taxable, so you owe an additional $17,500 in taxes (35% of $50,000).
  • Your AGI increases, potentially affecting deductions, IRMAA, and taxation of Social Security benefits.
• With a QCD
  • Instead of withdrawing the RMD, you directly donate $50,000 from your IRA to a qualified charity as a QCD.
  • This satisfies your RMD requirement, and the QCD is not counted as taxable income.
  • Result: You avoid $17,500 in additional taxes and your Adjusted Gross Income (AGI) remains lower.

Is a QCD Right for You? Washington Trust Wealth Management Can Help

For charitably inclined retirees with sizable IRAs, QCDs provide a disciplined way to satisfy RMDs, control AGI, and gradually reduce future tax exposure, especially as RMD percentages rise with age. Your experienced wealth advisor at Washington Trust can help you navigate the strategic, intentional use of QCDs to maximize your long-term goals and retirement planning.