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New Incentives for Charitable Giving
Overview
Your IRA is more than just a retirement account — it’s a powerful tool for charitable planning. Congress has expanded Qualified Charitable Distributions (QCDs) while the SECURE Act reshaped retirement plan rules. Together, these laws create important opportunities for donors who want to give strategically.
New QCD Opportunities
- Fund life income gifts from your IRA: A one-time QCD can now establish a Charitable Gift Annuity (CGA) or a Charitable Remainder Trust (CRT).
- Gift limits: $54,000 maximum in 2025 (indexed annually for inflation).
- Eligible beneficiaries: Payments may benefit only you and/or your spouse.
- Tax treatment: Payments fully taxable as ordinary income.
- Counts toward RMDs: These gifts satisfy your annual Required Minimum Distribution.
- Age rules: QCDs available at age 70½ (RMDs start at 73).
- No itemized deduction required: QCDs are excluded from taxable income “above the line.”
SECURE Act Highlights
- RMD age raised: Now 73, giving you more flexibility before withdrawals begin.
- Heirs’ rule: Non-spouse heirs must empty inherited IRAs within 10 years.
- Tax efficiency: Retirement plans are taxed at ordinary rates if left to heirs, but are tax-free when donated to charity.
- Best practice: Consider leaving IRAs to charity and appreciated securities or real estate to heirs.
Why This Matters
- Scale of opportunity: Trillions in retirement assets held by Baby Boomers represent the largest pool of potential legacy gifts.
- Dual benefits: Reduce taxes, meet RMDs, create lifetime income, and leave a legacy.
- Future growth: As Congress sees the success of these provisions, charitable IRA options may expand further.
What You Can Do
- Review your IRA and estate plan with a qualified advisor.
- Consider using a QCD to fund a charitable gift annuity or trust.
- Talk to us about making your IRA part of your philanthropic legacy.