Published February 8, 2023

By Leela Prendergast

New tax law rewards charitable IRA donors with new opportunities.

A change to tax laws allows those over 70 ½ to make charitable donations directly from their IRAs. It’s a timely change for some who may want to donate some of their savings to a charity or cause that they care about.

The law, the SECURE 2.0 act, was passed in December as part of the Consolidated Appropriations Act, which enhances charitable giving opportunities from Individual Retirement Accounts (IRAs). “This change to the law can bring tax benefits to many of our generous donors who support Rutgers,” says Jeremy Scarbrough, associate vice president of Estate and Gift Planning for the Rutgers University Foundation.

Under the new law, charitably minded IRA owners can now maximize their charitable impact and minimize taxes by making Qualified Charitable Distributions (QCDs), which are tax-free transfers directly from an IRA to public charities. QCDs may now be elected as a one-time transfer of up to $50,000 to establish a charitable remainder trust or charitable gift annuity. (Please note that various restrictions apply in the case of a charitable gift annuity and charitable remainder trust. The QCD may not be elected to contribute to a previously funded charitable remainder trust. All charitable giving decisions should be made based on your specific circumstances and upon consultation with personal advisers.)

Since the amount donated will not count against taxable income for that year, a QCD can result in significant savings for taxpayers in higher brackets. Additionally, any money donated through this method counts toward satisfying required minimum distributions (RMDs), which means that donors can avoid paying taxes on withdrawals made from their IRAs while still allowing them to support charities or causes that they care about.

For example, a 73-year-old who has a required minimum distribution of up to $50,000 could use this election to satisfy that required minimum distribution, avoid taxation on the transfer, and create a charitable gift annuity paying 6.3 percent annually for life. “Our team is here to answer questions about this exciting new opportunity and to help our donors evaluate the possibilities,” Scarbrough says.

To learn about this new opportunity and charitable giving options, please contact the Estate and Gift Planning Office at Rutgers University Foundation at or call 888-782-3666.