Top Five Questions about QCD CGAs: From RMDs to QLACs
Published by
Kara Morin
on
On August 27, 2026, PG Calc offered a free webinar on charitable gift annuities (CGAs) funded with qualified charitable distributions (QCDs) from individual retirement plans (IRAs). Here are the top 5 questions submitted by attendees and our answers to those questions.
1. How is the gift date established?
The QCD must go from the custodian to the charity, without passing into possession of the IRA owner. The easiest way for the custodian to make this transfer is by check.
If the custodian sends the check directly to your charity, then treat it as a cashier’s check and use the date on the check as the gift date, regardless of postmark.
If the custodian issues the check to the charity and mails it to the donor who then forwards it to your charity, the date of gift is again the date on the check.
If the donor has check writing ability on their IRA account, and handwrites a check to your charity against their account, then you must find out when the assets were removed from the donor’s IRA account. This can be the deposit date you verify with your bank, or the donor can verify the gift date by logging into their account to see when the gift was removed from their IRA.
QCDs are the rare instance in which the postmark does not factor into the gift date assigned a mailed check
.
2. What is the difference between the RMD (required minimum distribution) and the QCD?
An RMD is the amount the federal government requires a person over the age of 73 to withdraw from their retirement plan, whether it is an IRA, 403(b), 401(k), or similar retirement plan. The amount is a fraction of the balance in the plan at the end of the previous year and increases with the owner’s age. The RMD is designed to cause the retirement plan to waste over time. Unless the RMD withdrawal is made from a Roth IRA, the withdrawal is taxable as ordinary income.
A QCD is a tax-free distribution made from an IRA directly to a qualifying charity without coming into possession by the IRA owner. It can be applied towards the RMD. However, a donor’s RMD may be more or less than the maximum QCD allowed.
For instance, a donor with a required minimum distribution of $75,000 could decide to establish a CGA by directing a QCD of $55,000 to a qualifying charity. However, the donor would still have to withdraw another $20,000 to fulfill their RMD within the same calendar year. Here the QCD reduces, but does not eliminate, the RMD. There’s a hefty 25% tax penalty on any RMD withdrawal shortfall for the year.
More information on the alphabet soup of IRAs, RMDs, QCDs and CGAs can be found here:
https://www.pgcalc.com/insight-training/pg-calc-featured-articles/the-qcd-is-not-the-rmd
3. Are there any compliance issues a charity should be aware of if they want to issue a QCD CGA?
Yes. A QCD funded CGA is, by law, unassignable, including to the charity that issues it. This means the annuitant(s) cannot voluntarily sever the CGA and release it back to the charity while alive.
Because the assignability language is removed, the CGA is considered a new type of annuity agreement by states, such as New York and California, that require charities to submit prototype CGA agreements to them when registering to offer CGAs to their residents.
The four “flavors” of QCD CGA agreement that should be submitted to the relevant states are:
- Donor is the sole annuitant
- Donor’s spouse is the sole annuitant
- Donor is the first annuitant, the spouse is the second annuitant (consecutive annuitants)
- Donor and spouse share the annuity (concurrent annuitants)
If you use PGM Anywhere to draft your QCD CGA agreements, it will automatically remove the assignability clause when you identify the asset as a QCD. After that, it is a matter of selecting a prototype agreement rather than an agreement for a specific gift.
Our Gift Annuity Compliance team has a one-sheet overview detailing the eleven states that require some form of registration for CGAs. You can download it here:
https://giving.pgcalc.com/pg-calc-cga-state-laws-and-regs-for-2026
4. Can you use an inherited IRA to establish a QCD?
Yes, but only if the donor meets the minimum age requirement for the QCD, which is 70 ½. It is the inheritor’s age that matters, not the age of the deceased they inherited the IRA from. Please see our article about this here:
https://www.pgcalc.com/insight-training/knowledge-base/gifts-from-inherited-IRAs
5. Can two spouses combine their QCDs into a single CGA?
The legislation that brings the QCD CGA into being is silent on whether spouses can each direct a QCD to charity to establish a single CGA. PG Calc takes the conservative position that silence is not assent, and that since the scenario is not addressed, it is not allowed.
Instead, we recommend that each spouse establish their own CGA, and that the two CGAs have parallel structures (i.e., both are concurrent). The charity can make it feel like a single CGA by combining the CGA payments, but two CGA contracts should be established.
Bonus Question: Can a QCD be used to establish a QLAC?
(We didn’t have time to cover this in the webinar.) No. The QLAC (Qualified Longevity Annuity Contract) is a type of commercial annuity that can be purchased from within a Traditional IRA. Commercial annuities are a form of life insurance, not a charitable gift, so QCD legislation cannot be applied to the QLAC.
More information can be found here:
https://blog.pgcalc.com/i-made-my-qcd-cga-can-i-have-a-qlac
Our webinar discussion was wide-ranging, and if you’d like to watch, the recording is available for free here:
https://giving.pgcalc.com/qcd-q-a-free-webinar-recording
For a primer on QCD CGA basics, please visit our FAQ here:
https://www.pgcalc.com/support/knowledge-base/QCD-to-Life-Income-Gifts