What ingredients make powdered sugar not gluten-free?

The simple answer to your question is the kind of starch they use. Most use cornstarch or tapioca starch, neither of which contain gluten, so most powdered sugar shouldn't contain gluten. If the type of starch isn't listed, don't buy that product.

For absolutely no gluten, it gets a bit more complicated.

A Google search for "Gluten Free Powdered Sugar" only yielded a few brands that make a "gluten-free" claim. Since most brands of powdered sugar don't contain any ingredients that would normally contain gluten, look for the line "This product is processed in a facility that also processes wheat". Choose a powdered sugar that lists the starch used as cornstarch, tapioca starch or other non-gluten starch and that doesn't have that line on the label. Of course I can only speak to US labeling, other countries may be different.

One brand, Domino Sugar, stood out to really stand by their claim of gluten free. Domino's Gluten Free Claim (C&H is Domino, BTW). I happen to have some C&H powdered sugar, so I looked at the label. There is no "Gluten-Free" claim on the label, but the ingredients listed are only sugar and corntarch, and there is no "this product is processed in a facility..." warning. Walmart brand also pops up on the "Gluten Free Powdered Sugar" search, they say "Naturally gluten-free food". The FDA requires that claim not be misleading, so if they do use equipment to process the sugar that also processes gluten-containing ingredients, the sugar cannot contain more that 20 ppm gluten.

There is one way to know for sure about any ingredient you use, or to even to check your final dish. Elisa Technologies, a very well respected name in medical laboratory testing, has put out home test strips sensitive to 10 ppm, that's half the concentration of gluten the FDA allows for a product to be certified "gluten-free". If a product tested contains less than 20 ppm gluten the US, Canada and the European Union allow that product to use "Gluten Free" on the label. FDA Announcement At over $10 a strip, you'd want to use them judiciously, but if I or someone I loved had serious health issues that did not allow gluten, I'd get these strips. Test Strips

I have often used powered sugar, which is sugar and corn starch, here where live, in baked goods for my husband who has celiac. He has had no adverse reactions to items containing powdered sugar. I've never heard of powdered sugar being made with wheat starch. I never thought about cross contamination at the factory, though.

Powdered sugar contains starch. Starch is sometimes made from wheat. As gluten intolerance is triggered by trace levels of glutens, this might be enough for a bad reaction in a sensitive person.

You cannot know if powdered sugar has gluten traces when you buy it. The starch is not listed as an ingredient, much less the source of the starch. You cannot buy starch-free powdered sugar, as it would clump to a block of sugar within a day of production.

If you need powdered sugar in a recipe for a gluten intolerant person, it is best to use a food processor to cut your own sugar freshly for each use.

I just called C&H Sugar (1 800 773 1803) to see if their confection/powdered sugar is gluten free and they said it has less than 0.01% of corn gluten in it.