A bipartisan bill in Congress could give retirees more flexibility in how they donate from their retirement accounts. Tax experts also say timing matters, according to a report by CNBC.
How QCDs Work Today
Under current law, Americans aged 70½ or older can make a qualified charitable distribution, or QCD, a direct transfer from an IRA to an eligible nonprofit. The amount is excluded from taxable income and counts toward required minimum distributions (RMDs), which start at age 73. The 2026 annual limit is $111,000 per individual.
Bill Would Expand Giving Options
The Senate bill, introduced March 3 as a companion to a House measure, would allow QCDs to flow into donor-advised funds (DAFs), which are charitable accounts managed by nonprofits where donors get an up-front tax deduction and can recommend grants over time.
Why QCDs Offer Strong Tax Advantages
Tax attorney Richard Fox said a QCD is “almost always the …
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