Legacy IRA QCD: Eligibility, Beneficiaries, and Reporting

If you inherited an IRA and are at least 70½ years old, you can make a qualified charitable distribution from that inherited IRA under the same rules that apply to any other IRA. The 2026 annual exclusion is $111,000 per person, the transfer must go directly from your custodian to a qualifying charity, and the amount stays out of your gross income. For beneficiaries who owe required minimum distributions on the inherited account, a QCD can satisfy the RMD without adding a dollar to your taxable income.¹

Age and Account Eligibility

You must be 70½ or older on the day the money leaves the IRA. Not the year you turn 70½, and not the day you request the transfer. The day it actually goes out.

That age threshold is separate from the RMD starting age, which is now 73 for most people and 75 for those born in 1960 or later.² You can make QCDs in the years between 70½ and your RBD, which is often useful for beneficiaries drawing down an inherited account under the 10-year rule.

The statute treats inherited IRAs the same as personal IRAs for QCD purposes.³ Traditional, rollover, and SEP or SIMPLE IRAs (no longer receiving employer contributions) all qualify. Inherited 401(k)s and 403(b)s do not — if you inherited an employer plan, you’d need to move it into an inherited IRA before a QCD is possible.

The $111,000 annual limit is yours as an individual and applies across every IRA you hold, inherited and personal combined. Only otherwise-taxable dollars count; if the inherited account holds after-tax contributions, those don’t reduce your QCD room.⁴

If You’re a Surviving Spouse

A surviving spouse has two paths. You can keep the account titled as an inherited IRA and make QCDs from it, or roll it into your own IRA and make QCDs from there. Either way, the 70½ rule still applies to you.¹

If you’re not yet 70½ when you inherit, rolling the balance into your own IRA and waiting until you reach the QCD age is the cleaner setup. A QCD from either account will count toward any RMD you owe that year.

If You’re a Non-Spouse Beneficiary

How QCDs interact with your distributions depends on which RMD regime governs the inherited account.

Beneficiaries Taking Annual Life-Expectancy RMDs

Some non-spouse beneficiaries still get life-expectancy RMDs rather than the 10-year drawdown. This group includes people who inherited before 2020 and “eligible designated beneficiaries” — minor children of the deceased, disabled or chronically ill individuals, and beneficiaries not more than 10 years younger than the deceased.¹

For these beneficiaries, a QCD is a clean match: it satisfies the annual RMD and keeps the entire amount out of gross income.

Beneficiaries Under the 10-Year Rule

Most non-spouse beneficiaries who inherited in 2020 or later must empty the account by the end of the 10th year following the original owner’s death. Whether you also owe annual RMDs during years one through nine depends on one question: had the original owner already reached their required beginning date before dying?

Owner died before RBD: no annual RMDs are required in years one through nine. You just need to drain the account by year 10. You can still choose to make QCDs in any year you’re 70½ or older, even without an RMD forcing a withdrawal.
Owner died on or after RBD: you owe annual RMDs in years one through nine, calculated on the IRS life-expectancy tables, with the balance distributed by year 10. A QCD can satisfy those annual RMDs without adding taxable income.

The IRS finalized regulations effective for 2025 requiring those annual distributions when the owner died after their RBD. The penalty relief that applied while the rules were unsettled is over.¹

The Year-of-Death RMD

When an IRA owner dies after their required beginning date without having taken their full RMD for that year, the beneficiary must take whatever is left. If you’re 70½ or older, a QCD from the inherited IRA can fill that shortfall. Missing the year-of-death RMD triggers a 25% excise tax on the amount not distributed, reduced to 10% if corrected within two years.¹

Which Charities Qualify

The recipient must be an organization described in Section 170(b)(1)(A) of the Internal Revenue Code, which covers most public charities, churches, educational institutions, and hospitals. The transfer must go straight to the charity, and you cannot receive anything of value in return — no dinner, no tickets, no merchandise.³

Three types of otherwise-charitable organizations are excluded:

Donor-advised funds. You cannot route a QCD through a DAF, even though DAFs are housed at 501(c)(3) sponsors.
Supporting organizations under Section 509(a)(3).
Private non-operating foundations, including most family foundations.

Confirm the recipient’s status with the organization or through the IRS Tax Exempt Organization Search before you initiate the transfer. A QCD sent to an ineligible recipient becomes a regular taxable distribution with no correction path.

Executing the Transfer Without Disqualifying It

“Direct transfer” is the whole game. Your custodian must send the money to the charity. If a check is made payable to you — even if you endorse it over to the charity the same day — the distribution is taxable.

Order of operations matters when you owe an RMD. Once you’ve withdrawn your full RMD for the year, a later QCD cannot retroactively replace it. Make the QCD first, then take any additional distribution you need.

The transfer has to be completed by December 31 of the tax year, and “completed” means the charity has received the funds. If you request a check in mid-December and the charity deposits it in January, it counts for the following year. Electronic transfers are faster and safer for late-year gifts.

Amounts above $111,000 are simply treated as ordinary taxable distributions. There is no penalty for going over — just no exclusion on the excess.

Reporting a QCD From an Inherited IRA

Your custodian will issue Form 1099-R showing the gross distribution in Box 1. For a QCD from an inherited IRA, Box 7 should carry Code Y alongside Code 4 (death distribution). Confirm the coding before filing — mis-coded 1099-Rs are a common source of IRS notices on QCDs.⁵

On Form 1040, put the full distribution from Box 1 on Line 4a. On Line 4b, enter zero if the entire distribution was a QCD, or enter only the non-QCD portion. Check box 2 on Line 4c to flag the QCD.⁶

Get a written acknowledgment from the charity showing the date, the amount, and a statement that you received nothing in return. Obtain it before you file, and keep it with your tax records. Your 1099-R by itself is not adequate substantiation.⁷

1
Internal Revenue Service. Publication 590-B (2025), Distributions from Individual Retirement Arrangements (IRAs)
2
Congress.gov. Required Minimum Distribution (RMD) Rules for Original Account Owners
3
Office of the Law Revision Counsel. 26 U.S. Code 408 – Individual Retirement Accounts
4
Internal Revenue Service. Seniors Can Reduce Their Tax Burden by Donating to Charity Through Their IRA
5
Internal Revenue Service. Instructions for Forms 1099-R and 5498
6
Internal Revenue Service. 1040 (2025) Instructions
7
Internal Revenue Service. Substantiating Charitable Contributions