By Andy Ives, CFP®, AIF®
IRA Analyst
QUESTION:
I make a qualified charitable donation (QCD) to my local church on a monthly basis. I know that the receiving charitable organization must provide me with a written confirmation that no favors were given in return for my donation. My question is whether I need a written confirmation from the charitable organization for each individual QCD, or can the organization just provide a single end-of-year confirmation statement summarizing all QCD donations for the entire year to meet the tax requirements for documentation?
ANSWER:
A single year-end receipt from the charity that summarizes the total annual donation amount is acceptable. This receipt (which is technically called a “contemporaneous written acknowledgement”) must state that no goods or services were received for the donation.
QUESTION:
Your answer to a recent QCD question was: “Yes, you can continue to do QCDs in 2026. Even though your entire required minimum distribution (RMD) has been satisfied and you even did a Roth conversion, QCDs are still available. The only limitation is the annual QCD cap ($111,000 in 2026).” My understanding is there is another thing to be aware of: QCDs, while still being allowed after the RMD is satisfied, will not reduce taxable income as they do when made before completing the RMDs. Is that correct?
John
ANSWER:
John,
You are on the right track. The only income that a QCD can offset is the income that would have been realized had the IRA distribution NOT been sent to a charity via QCD. A QCD cannot reduce any other income, because the QCD “offset” is applied entirely to the dollars coming out of the IRA. An IRA owner can do QCDs up to $111,000 in 2026, regardless of what their RMD might be, but the entire $111,000 will go toward offsetting what would have been a taxable IRA distribution had the QCD not been done. It is a wash. I like to say that QCDs can offset “anticipated IRA income,” meaning that if an IRA owner knows at the beginning of the year that they have a $10,000 RMD, that income is anticipated. They can offset/reduce that $10,000 anticipated IRA income with a QCD (and they can do this up to $111,000). But non-IRA income cannot be reduced with a QCD.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.