The Impact of the SECURE Act on Charitable Giving

Emily Sulzle | Assistant Director of Gift Planning

The SECURE Act, effective January 1, 2020, made several changes to qualified retirement plans that impact charitable giving. The major changes are:

  • The age at which required minimum distributions (RMDs) must be taken was pushed back from 70½ to 72 years old – BUT the age at which qualified charitable distributions (QCDs) can be made is still 70½
  • The “Stretch IRA” has been eliminated for most heirs, making IRAs an expensive inheritance

The impact of these changes depends on whether charitable giving is outright (QCDs) or after a donor’s death (beneficiary designations):

Individuals may make charitable gifts from their IRAs at age 70 ½ and not count those dollars as taxable income. Past age 72, that contribution may also qualify as a required minimum distribution. Individuals may make gifts up to $100,000 from their IRA each year.

Note: Tax-deductible contributions to your IRA may impact your ability to make a QCD. If you plan to continue making tax-deductible contributions to your IRA and make QCDs, contact your tax advisor to determine the tax implications.

With the effective elimination of the “Stretch IRA,” which allowed heirs to take payments from their inherited IRAs over their lifetime, heirs will be paying income tax on the entire amount of the IRA within 10 years. Certain beneficiaries are still eligible for a “Stretch IRA”: spouses, minor children, disabled, chronically ill, or an individual not more than 10 years younger than the original IRA owner.

Because of the increased tax burden of using IRAs as an inheritance, individuals may want to:

  1. Designate all or part of their IRA to charities dear to their hearts and use other more tax-friendly assets to provide for their families. Any amount inherited by the charity avoids any taxes.
  2. Designate a Charitable Remainder Trust as the beneficiary of their IRA and name heirs as income recipients of the trust, providing regular income for either the recipients’ lifetimes or a term of up to 20 years, and then making a future gift to a charity.

It will be important for you to review your plans with your advisors to determine whether the SECURE Act impacts you – for instance, if your IRA is designated to a non-charitable trust that no longer meets “Stretch” requirements.

IRAs continue to be an increasingly powerful source of wealth to make charitable gifts in tax-wise ways. Making smart gifts through your IRA will allow you to make more impactful gifts to the causes you care about and potentially leave more tax-free dollars to your family.

For questions or more information, Emily Sulzle can be reached at 402.323.7329 or

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