Good news keeps coming: Retirement plans and charitable giving

June 10, 2026  |  Professional Advisors

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You’ve no doubt noticed that Qualified Charitable Distributions (“QCDs”) continue to gain traction as one of the most practical and effective charitable planning tools for clients over age 70 ½. By allowing eligible clients to transfer funds directly from an IRA to a qualified charity without recognizing the distribution as taxable income, QCDs can help reduce adjusted gross income while supporting charitable priorities. For many clients—especially those who do not itemize deductions—a QCD is particularly appealing.

Current Trends with QCDs

What’s especially notable is that in recent years, Congress has expanded planning opportunities by indexing annual giving limits for inflation ($111,000 per person in 2026) and allowing certain one-time QCDs (“Legacy IRAs”) to fund charitable gift annuities and charitable remainder trusts.

And now, proposed legislation known as the “Charity Parity Act” would, if enacted, extend QCD treatment beyond IRAs to include employer-sponsored retirement plans such as 401(k)s, 403(b)s, and 457(b)s. This potential change in the law would remove the extra step of rolling assets into an IRA before making a charitable gift, simplifying the process for many donors whose retirement savings remain primarily in workplace plans.

Consider a typical client scenario. Your client, age 74, is taking Required Minimum Distributions (“RMDs”) from a traditional IRA. Because the client claims the standard deduction, charitable gifts do not generate additional tax savings. By instead directing a portion of the RMD to a qualified nonprofit as a QCD, the client can satisfy part or all of the RMD obligation without increasing taxable income.

In many cases, this can also help reduce Medicare premium surcharges and lessen the taxation of Social Security benefits, creating planning advantages beyond the charitable deduction itself.

How Central Florida Foundation Can Help

Here are two examples of how Central Florida Foundation can help your client achieve charitable goals through QCDs:

Example #1

A client directs a QCD to Central Florida Foundation to establish an IRA Rollover Fund, which is a fund that works like an Area of Interest Fund or Designated Fund. These funds are customizable by the donor at setup, then CFF carries out the donor’s wishes on how the funds are distributed over time.

Example #2

A client directs a QCD from an IRA to an established CFF Area of Interest Fund or Designated Fund to support broad community needs. The client satisfies part or all of the client’s annual RMD requirements while supporting CFF’s grantmaking that addresses priorities in the region.

Tip: Check Beneficiary Designations

Keep in mind that charitable giving with IRAs goes beyond current gifts to nonprofits. As part of advising clients about their IRAs, be sure to check their beneficiary designations. Not only is it tax advantageous for a client to name a fund at CFF or other public charity as beneficiary of an IRA, but it’s also a best practice to avoid problems in the future. (Retirement plan beneficiary designations continue to show up in cautionary tales!)  

For attorneys, CPAs, and financial advisors, developments related to QCDs are worth watching closely. QCDs increasingly serve as a natural connector among retirement planning, philanthropy, and legacy conversations. Just as importantly, QCD discussions often open the door to broader planning opportunities, helping clients align financial goals with the causes and communities they care about most.

As always, please reach out to our team at any time!

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The team at the community foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

This post was written by Laurie Crocker.