As you counsel charitable clients who are age 70 ½ or older, it is crucial to consider a tool called the Qualified Charitable Distribution, or QCD. You’re likely aware that a QCD allows an individual who is age 70 ½ and older to give up to $111,000 in 2026 directly from an IRA to an eligible charity, including funds at the Community Foundation. The QCD is a tax-savvy way for clients to fulfill charitable intentions while managing taxable income.
New legislation in Congress could expand charitable planning opportunities involving QCDs even further. To get up to speed quickly, the Community Foundation for Northern Virginia invites you to skim through six FAQs about developments affecting charitable giving from retirement accounts.
What’s the latest pending legislation?
Bipartisan legislation known as the Charity Parity Act was introduced in both the House and Senate in May 2026. If enacted, the new law would allow individuals who are age 70 ½ and older to make QCDs directly from employer-sponsored retirement plans such as 401(k), 403(b), and 457(b) accounts, in addition to IRAs.
Why is this legislation noteworthy?
Under current law, Qualified Charitable Distributions are available only from IRAs, meaning that many individuals must first roll assets from an employer-sponsored plan into an IRA before making a QCD that is excluded from taxable income. According to the Plan Sponsor Council of America (PSCA), the legislation is designed to create balance between IRAs and workplace retirement plans while reducing administrative hurdles that may discourage charitable giving.
Why should I pay attention to this legislation?
As attorneys, CPAs, and financial advisors, you likely have many clients age 70 ½ and older who own retirement assets well beyond their IRAs. The proposed legislation could make charitable giving easier for these clients. Today, a client whose retirement assets remain in a 401(k) or 403(b) must typically complete a rollover before taking advantage of QCD rules. The Charity Parity Act would remove the need for that rollover in many cases, potentially reducing paperwork, fees, delays, and administrative complexity.
How can the Community Foundation for Northern Virginia help?
The Community Foundation can help your clients use retirement assets to create lasting community impact. For example, a client interested in supporting a particular area of need could direct QCDs to a field-of-interest fund focused on causes such as education, health care, the arts, or the environment. Alternatively, clients who wish to support specific charitable organizations over time might consider a designated fund. In each case, the Community Foundation can help structure a charitable fund that aligns with the client's philanthropic goals while creating a lasting charitable legacy. This fund, in turn, can receive QCDs from IRAs and, if the proposed legislation becomes law, from other eligible retirement plans. (Note that current law does not permit a donor to direct QCDs to a donor-advised fund.)
What should I be doing right now?
The most important step is to identify clients age 70 ½ or older who have both charitable intent and significant retirement assets. Many clients are familiar with Required Minimum Distributions (“RMDs”) but are less aware of charitable planning opportunities involving retirement accounts. Whether or not the Charity Parity Act ultimately becomes law, conversations about QCDs, beneficiary designations, and other retirement-based giving strategies can help align clients’ financial plans with their values. You can certainly let clients know that new legislation may expand QCD opportunities beyond just IRAs.
Is there other legislation I need to be aware of?
Yes! H.R. 2891, the IRA Charitable Rollover Facilitation and Enhancement Act of 2025, is a still-pending bipartisan bill that has been introduced in both the U.S. House and Senate. If enacted, the new law would allow QCDs to be made to donor-advised funds. For now, QCDs still cannot be directed to donor-advised funds, although many organizations in the charitable sector continue to advocate for this change.
As always, the Community Foundation for Northern Virginia is happy to work alongside attorneys, CPAs, and financial advisors to evaluate charitable planning opportunities involving retirement assets and to help your clients create charitable funds that will support their favorite causes for years to come.
This material is intended for informational/educational purposes only and should not be construed as investment, tax, or legal advice. Please contact your financial, tax, and legal professionals for more information specific to your situation.
The Community Foundation team is happy to help you structure charitable giving tools and plans to achieve your clients’ philanthropic goals—whether through beneficiary designations or any other type of charitable giving vehicle. This email address is being protected from spambots. You need JavaScript enabled to view it.!
Questions?
