QCDs, RMDs and CRTs: Making Sense of the Secure Act 2.0 Alphabet Soup

January 30, 2023Giving Strategies

Tax-savvy philanthropists may be interested in new provisions included in the $1.65 trillion omnibus spending bill, the Consolidated Appropriations Act of 2023 (CAA). These provisions, often referred to as SECURE 2.0, build upon the original SECURE Act of 2019 and provide enhancements to the rules for utilizing a qualified charitable distribution (QCD).

Here are three key provisions affecting philanthropists in the new law:

  1. Increase in IRA RMD age: The required minimum distribution (RMD) age from an IRA increased to 73 on January 1, 2023 and will increase again to 75 on January 1, 2033. While this provision is not directly tied to charitable giving, it can impact your overall financial plans and potentially affect the timing and strategy of your giving. As a reminder, required minimum distribution (RMD) refers to the mandated amount a taxpayer must withdraw from qualified retirement plans, which include IRAs as well as 401(k)s and other tax-deferred retirement accounts.
  2. Increase in QCD limit: The annual per-taxpayer $100,000 QCD cap is now slated to be indexed for inflation, which will allow taxpayers to give even more from their IRAs directly to charity.
  3. One-time, split-interest election: Taxpayers may now make a one-time $50,000 QCD transfer to a charitable remainder trust (CRT) or another split-interest gift, such as a charitable gift annuity (CGA). Split-interest gifts are gifts in which the donor receives a benefit during their lifetime or for a set term, with the remainder benefiting a charitable organization(s).

Here’s what has not changed:

  1. Eligibility for making a QCD still starts at 70 ½. This allows taxpayers who are not yet required to take IRA distributions under the RMD rules to still take advantage of the QCD technique without the income tax hit on the distributed funds while also removing those funds from liability for future estate taxes.
  2. Taxpayers required to take RMDs can still count QCDs toward their RMDs, thereby avoiding the usual income tax hit on RMD dollars.
  3. Charities eligible to receive QCDs include designated funds, field-of-interest funds, and scholarship funds at the Community Foundation, but still not donor advised funds.

To discuss how this legal update will affect your giving strategy for 2023, and beyond, contact BGCF General Counsel/Director of Planned Giving Halee Cunningham at 859.225.3343 or