Expanded IRA QCD Opportunities

Individuals who are 70 ½ and older have the ability to make gifts through an IRA qualified charitable distribution (QCD) of up to $108,000 a year directly to charity. There is also a new one-time opportunity to use up to $54,000 from an IRA QCD to create a charitable gift annuity or charitable trust that pay beneficiaries an income for life and provide a gift for Georgetown.

The Legacy IRA Act expanded how IRA QCDs can be used and now allows individuals the opportunity to use an IRA QCD of up to $54,000 to fund a Charitable Gift Annuity (CGA) or Charitable Remainder Trust (CRT). Rising interest rates have made CGAs even more attractive due to the increased payout rate (based on the age of the beneficiary). The current payout rate for an 80 year old is 8.1% and 7.0% for a 75 year old (based on January 2025 rates). 

Important details about this new QCD opportunity include:

• Although not limited to a single gift, the full $54,000 must be used within a single year and can be done only once during the lifetime of the IRA owner. This allows the option to create multiple CGAs with one or several charities.
• CGAs and CRTs must qualify for a charitable deduction under current law – Georgetown offers both options.
  
• CGA and CRT payments will be fully taxable; this isn’t usually the case with CGAs.
  
• CGA payout rates must be at least 5% (not currently an issue with rising interest rates).
• QCDs must be made to a CGA or CRT funded only with IRA assets, so additional contributions cannot be made to existing CRTs.
• Spouses may each contribute $54,000 from separate IRAs to create a new CRT.
• CGA and CRT payments are limited to the IRA owner and/or a spouse.
• Payments must begin no later than one year from the date of funding.
• When using a QCD to create a CGA or CRT, there is no charitable deduction because the funds were not previously subject to income tax.
  

There are also changes for regular IRA QCD gifts to charity under the Legacy IRA Act:

• For 2025, the annual limit will be $108,000.
• Raised the age for IRA required minimum distributions to 73 in 2023 and 75 in 2033.

If you are interested in learning more about using an IRA QCD to make a gift or create a CGA or CRT for Georgetown, please contact the Office of Planned Giving at 202-687-6778, email us at plannedgiving@georgetown.edu, or fill out our information request form.

The information on this website is not intended as legal, financial, or tax advice. Please consult an attorney, financial advisor, or tax advisor in your planning.