A qualified charitable distribution (QCD) lets you donate money directly from your IRA to a qualified charity. If it meets all IRS requirements, the amount is excluded from your taxable income. Expand the sections below to learn about eligibility, limits, and how to request a QCD from your Gusto IRA.
A qualified charitable distribution (QCD) may allow you to send money directly from your IRA to one or more qualified charities. If the distribution meets all requirements to be considered a QCD, the amount will not be included in your taxable income.
Any IRA owner or beneficiary who is 70½ or older on the date the distribution takes place is eligible to make a QCD.
The allowable QCD limit may increase each year. For 2026, the maximum amount is $111,000. This limit includes all distributions from all IRAs you own. If you are married and your spouse also chooses to make a QCD, they can donate up to their own individual limit.
The maximum amount of the QCD is reduced by any deductible contribution you make to a traditional IRA in the same year. The IRS provides examples of the calculation and a worksheet to help you determine your limit.
QCDs can come from a traditional or Roth IRA. They can also be made from a Simplified Employee Pension (SEP) or Savings Incentive Match Plan for Employees (SIMPLE) IRA, as long as the plan is not "ongoing." A SEP or SIMPLE IRA is considered ongoing if employer contributions are made in the same year as the distribution you want to treat as a QCD.
For an IRA distribution to be considered a QCD, it must meet all of the following:
The amount must be paid to a qualified charity.
The amount must be paid directly to the qualified charity. The check does not need to be mailed directly from the financial institution, but it must be made out to the charity. If you deposit the distribution into your personal bank account and then write a check to the charity, it will not be considered a QCD.
The assets must otherwise be taxable. Non-deductible contributions to a traditional IRA or normal contributions to a Roth IRA cannot be included in a QCD.
Any amount you take as a QCD counts toward the required minimum distribution (RMD) you need to take from your IRA for that year.
If the QCD is more than your RMD, the extra amount does not offset your RMD for future years. QCDs also do not offset any RMDs you may need to take from an employer-sponsored plan, like a 401(k) or 403(b) plan.
If you make a QCD, you will get a Form 1099-R showing the distribution from your IRA. There is no special reporting for QCDs, and other distributions you take may appear on the same form. You need to claim the amount of your QCD on your tax return.
Consult your tax advisor if you have any questions about claiming your QCD for tax purposes.
You can make a one-time distribution to a split-interest entity. For 2026, the total amount of the distribution to the split-interest entity is limited to $55,000.
Split-interest entities and the rules around their funding are complex. Work with your tax advisor to confirm all requirements are met.
To request a QCD from your Gusto IRA, contact a Gusto Retirement representative at [email protected]. We will help you get the process started.
This information is general in nature and is for informational purposes only. It should not be used as a substitute for specific tax, legal, or financial advice that considers all relevant facts and circumstances. You are advised to consult a qualified financial adviser or tax professional before relying on the information provided herein.