High Fives for IRAs, QCDs and Charitable Giving

When you think about charitable giving, your IRA may not be the first asset that comes to mind. But for many people, retirement accounts represent a significant part of their financial picture. They can also create opportunities to support the organizations and causes that matter most.

The rules surrounding IRAs, Required Minimum Distributions (RMDs) and Qualified Charitable Distributions (QCDs) can be confusing. You don't have to navigate them alone.

At the Greater Manhattan Community Foundation, we work alongside donors and their professional advisors to explore charitable giving strategies that fit their goals. As year-end approaches, here are five things worth knowing about IRAs, QCDs and charitable giving.

1. Age 70½ is an important charitable giving milestone.

If you are age 70½ or older, you may be eligible to make a Qualified Charitable Distribution, or QCD, directly from your IRA to an eligible charitable organization.

This opportunity begins before RMDs generally begin, which may be at age 73 or 75 depending on your birth year. In other words, you don't have to wait until you're required to take distributions to consider using a QCD as part of your charitable giving.

2. The 2026 QCD limit is $111,000 per taxpayer.

For 2026, an eligible individual may make up to $111,000 in QCDs from an IRA. If you are married and both spouses meet the eligibility requirements and have separate IRAs, each spouse has a separate limit.

A qualifying QCD is generally excluded from taxable income rather than claimed as a charitable income tax deduction. For those already taking RMDs, a qualifying QCD can also count toward satisfying the RMD.

That can make a QCD worth discussing with your tax and financial advisors, particularly if charitable giving is already part of your plans.

3. How the gift is made matters.

With a QCD, the details are important. To qualify, the distribution generally must go directly from your IRA to an eligible charitable organization.

Under current law, QCDs generally cannot be made to donor-advised funds. But that doesn't mean GMCF can't help. Other types of charitable funds at the Foundation may be eligible to receive QCDs, depending on the fund and circumstances.

If you're considering a QCD, reach out before initiating the transfer. We can work with you and your professional advisors to explore options that align with your charitable goals.

4. QCD rules may continue to evolve.

There are proposals in Congress that could expand the ways QCDs can be used, including proposals involving certain employer-sponsored retirement plans and donor-advised funds.

Those proposals are not current law, but they are worth watching. Changes could create additional charitable planning opportunities for donors with retirement assets in the future.

For now, the important thing is to plan based on the rules currently in place and work with your professional advisors before making a distribution.

5. Your retirement assets can also be part of your legacy.

QCDs provide an opportunity for eligible donors to use IRA assets for charitable giving during their lifetime. But retirement assets can also play another role: supporting the people, organizations and communities you care about after your lifetime.

A charitable organization, including GMCF or certain funds at the Foundation, may be named as a beneficiary of an IRA or other retirement account.

For some donors, retirement accounts can be particularly useful assets to consider for charitable legacy planning because traditional retirement assets left to individual beneficiaries may have income tax implications, while a tax-exempt charitable organization generally does not pay federal income tax when it receives those assets for charitable purposes.

Depending on the account, adding a charitable beneficiary may be as simple as updating a beneficiary designation. Any changes should be coordinated with your overall estate plan and reviewed with your legal, tax, and financial advisors.

One more thing: You don't have to figure it out alone.

Your retirement assets sit at the intersection of financial planning, tax planning, estate planning and charitable giving. That's why collaboration matters.

Whether you're considering a QCD before year-end, thinking about including charitable giving in your beneficiary designations or simply wondering whether your retirement assets could help you accomplish more for the causes you care about, GMCF can help start the conversation.

You know what matters to you. We can work alongside you and your professional advisors to explore how your charitable giving can help support it.

This information is provided for educational purposes and should not be considered tax, legal or financial advice. Please consult your professional advisors regarding your individual circumstances.