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Giving from your IRA under the new SECURE Act

For individuals 70 ½ and older, using an IRA to fund a Qualified Charitable Distribution (QCD) can be a tax savvy way to extend your philanthropic giving. A taxpayer 70 ½ or older may annually transfer up to $100,000 from an IRA directly to a qualifying nonprofit. At age 72, a QCD may satisfy applicable Required Minimum Distribution (RMD) requirements, allowing the taxpayer to give more to favorite charities and possibly reduce income taxes. 

If you opt to take advantage of new tax rules outlined in the 2019 SECURE Act that allow for IRA contributions for qualifying taxpayers over age 70 ½, amounts transferred to qualifying charities via QCD may be impacted. We encourage you to consult with your tax or financial advisor to find out more about this provision and its possible impact.

How it Works

While current law disallows QCD gifts to be used to establish or add to a Donor Advised Fund, there are several other fund types that will allow you to support your community, a field of interest or a specific nonprofit.  

  • Unrestricted Fund – Support the needs of the Richmond region annually through an unrestricted fund that allows the Community Foundation to make strategic grants to projects and programs in the areas of Health and Wellness, Economic Prosperity, Educational Success and Community Vibrancy. 
  • Field of Interest Fund – Target your giving to causes important to you. The Community Foundation makes strategic grants to programs addressing your specific interest area(s).
  • Designated Fund – Support the mission of a specific nonprofit organization(s) with ongoing grants to help sustain their good work. 

Donor Example

A donor used her Qualified Charitable Distribution to establish a designated fund for three of her favorite nonprofits, ensuring that her giving continued annually during her lifetime and in perpetuity. By creating a designated fund, she could discontinue her annual gift to each of these organizations, knowing that it was replaced by an annual grant from her designated fund.    

 


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