30 Oct High Fives for IRAs & QCDs!
One of the most common areas of confusion (understandably!) for donors and fund holders is how to use IRAs and other retirement accounts to further charitable goals. And it’s an important topic because Americans who’ve been in the workforce for a few decades have watched their 401(k)s, IRAs, and other retirement accounts grow nicely! Retirement accounts are a major asset on many families’ balance sheets.
At the Community Foundation of Grant County, we understand how tricky it can be to keep track of all the rules. We’re here to work alongside you and your tax and estate planning advisors to help you develop a charitable giving plan that achieves your goals, including ways to use your retirement assets to Give To Grant.
As year-end approaches, here are five important things to know!
1. Age 70½ is still an important charitable giving milestone.
If you’ve reached age 70½, you may be eligible to make a Qualified Charitable Distribution (QCD) directly from your IRA to an eligible charitable organization.
This opportunity begins even though Required Minimum Distributions (RMDs) generally don’t begin until age 73 or 75, depending on your birth year. In other words, you don’t have to wait until RMDs begin to start using QCDs for charitable giving.
2. The 2026 QCD limit is $111,000 per taxpayer.
The annual QCD limit is adjusted for inflation and is $111,000 in 2026. If you’re married and both you and your spouse meet the eligibility requirements and have your own IRAs, each of you has a separate limit.
Unlike a conventional charitable contribution, a QCD generally is excluded from your taxable income rather than claimed as a charitable income tax deduction. And if you’re already taking RMDs, a qualifying QCD can count toward your required distribution.
This can make a QCD particularly attractive if you don’t itemize deductions or simply want to use a portion of your IRA to support the organizations and causes you care about right here in Grant County.
3. Make sure the money travels the right path.
The details matter! To qualify as a QCD, the distribution must be made directly from your IRA to an eligible charitable organization. Generally, you can’t withdraw the money yourself, deposit it into your bank account, and then write a check to charity and receive QCD treatment.
There’s another important limitation: Under current law, donor-advised funds generally cannot receive QCDs. However, other types of charitable funds at CoFo may be eligible to receive these gifts, including certain unrestricted, designated, field-of-interest, and scholarship funds.
Not sure whether your fund qualifies? We’re happy to help you find out!
4. Don’t forget about your IRA when planning your legacy.
QCDs allow you to use retirement assets for charitable giving during your lifetime. But there’s another opportunity that’s easy to overlook: You can name the Community Foundation of Grant County, including an eligible charitable fund, as a beneficiary of an IRA or other retirement account.
Retirement accounts can be particularly attractive assets to leave to charity. Traditional retirement assets left to individual heirs may carry income tax consequences, while a tax-exempt charitable organization generally doesn’t pay income tax when it receives those assets.
And the process may be surprisingly simple. You may be able to leave all or a percentage of a retirement account to charity simply by updating your beneficiary designation, without changing your will or revocable trust.
Of course, coordinate any beneficiary designation with your overall estate plan and review it with your legal, tax, and financial advisors.
5. And a bonus high five: You don’t have to figure this out on your own!
Retirement assets sit at the intersection of tax planning, financial planning, estate planning, and charitable giving. That’s one reason we enjoy working alongside your professional advisors.
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, please reach out.
We’re here to help you explore the possibilities and turn your generosity into lasting good for Grant County!
The Community Foundation of Grant County connects people, resources, and causes to promote sustainable impact toward the betterment of Grant County. Through a variety of charitable funds and giving opportunities, we help individuals, families, businesses, and nonprofits make a meaningful difference in the community we call home. Learn more at GiveToGrant.org.
This article is for educational purposes and does not constitute tax, legal, or financial advice. Please consult your professional advisors regarding your individual circumstances.
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