Qualified Charitable Distribution (QCD) Rules Have Changed: Why the Burden of Proof Still Rests on the Taxpayer

Financial advisers will need to help their clients navigate the new landscape while waiting on the IRS to make the paperwork available.

Myles J. McHale, Jr. AIF®, CRPP®'s avatar
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Congress has expanded the annual qualified charitable distribution limit — now well above $100,000 per taxpayer, indexed for inflation.

But as of early November, the IRS has not updated any forms, worksheets or instructions to reflect the procedure to benefit from these higher limits. That means the burden of proof rests squarely on the taxpayer.

Here's another way you and your advisory team can create and add significant value to that client relationship.

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Think of QCDs as self‑checkout

Today's QCD works a lot like self‑checkout at grocery and drugstores. The system is there, the benefit is real, and the process is efficient — but only if the taxpayer does the scanning.

  • Your IRA custodian will report the distribution, but not necessarily label it as a QCD
  • The IRS will receive the 1099‑R, but again, not necessarily identifying the charitable transfer and qualifying deduction
  • With no updated IRS form (as of early November), your client must properly claim the QCD yourself to receive the exclusion from income.

About Adviser Intel

The author of this article is a participant in Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Why QCDs still matter

A properly executed QCD:

As an elite adviser, you know the benefit is substantial — but only if the reporting is correct.

QCD checklist: Advisor/client compliance guide for tax year 2026

Before the distribution, you should:

  • Confirm eligibility. Client/spouse must be age 70½ or older.
  • Verify IRA type. Traditional IRA, inherited IRA or inactive SEP/SIMPLE. (Does not apply to Roth IRAs).
  • Check charity status. Must be a 501(c)(3) public charity.
  • Know the limit. For 2026, the limit is $111,000 per taxpayer. A couple with means, married filing jointly, could contribute up to $222,000.

This is inflation‑indexed and will be updated each year.

When making the distribution:

  • Request a direct transfer. Custodian must pay the charity directly!
  • Avoid personal receipt. Checks payable to your client and/or spouse don't qualify. This is different from standard IRA rollover procedures at many custodians, so you must press on this issue. Otherwise, your clients' deduction might be in jeopardy.•
  • Get appropriate charity acknowledgment. Must confirm no goods or services were provided to your clients.

When reporting the QCD (the self-checkout part):

  • Review your client's 1099‑R. It won't identify a QCD.
  • Report full amount on 1040 line 4a. Enter total IRA distribution.
  • Reduce taxable amount on line 4b. Subtract QCD; write "QCD" next to line 4b.
  • Retain all documents. The burden of proof is 100% on the taxpayer — your client.

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Adviser take-away and bottom line

QCDs remain one of the most powerful charitable‑giving tools available — but in 2026, they function like a self‑audited exclusion. The benefit is real, the rules have been changed by Congress, and yet the IRS has not automated and modernized the reporting procedures.

If you want your client relationship to receive the full tax break, they/you must identify, document, and claim the QCD correctly.

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Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Myles J. McHale, Jr. AIF®, CRPP®
Myles J. McHale, Jr. AIF®, CRPP®
President and Founder, Wealthcare Advisors and Consultants, LLC; Adjunct Instructor, Cannon Financial Institute

Myles J. McHale Jr. is the President and Founder of Wealthcare Advisors and Consultants, LLC, with over 40 years of experience in financial services. Wealthcare provides proven and successful financial transitions for individuals and families. He has held leadership roles, including Senior Investment Officer and Regional President at US Bank, Wilmington Trust/M&T Bank, Fleet Investment Services, Chase Manhattan Bank and The Morgan Bank. He has been an Adjunct Instructor at Cannon Financial Institute for the past 15 years, sharing expertise in investment management, charitable foundation management and retirement services.