Tongue Twister: OBBBA, IRAs, QCDs and FAQs

OCCF’s Julie Dais meets with an advisor.

The Answer:

This is a great question, and it’s super important. The short answer is no – the One Big Beautiful Bill Act did not directly change the IRS’s rules for Qualified Charitable Distributions, or “QCDs.” Through a QCD, a taxpayer who is over the age of 70 ½ can direct up to $108,000 (2025 limit) from an IRA to an eligible charity, including some types of funds at the Oklahoma City Community Foundation.

The Answer:

We are glad you asked! QCDs are even more tax-savvy after the One Big Beautiful Bill Act because they bypass the new 0.5% adjusted gross income floor that will apply to itemized charitable deductions starting in 2026. Unlike other gifts, QCDs also avoid the 35% cap on deduction value for high-income taxpayers, preserving their full tax benefit. Because they reduce taxable income directly without requiring itemization, QCDs provide retirees a simple, consistent way to maximize charitable impact in a more restrictive tax environment.

The Answer:

Anytime! Several types of funds at OCCF are eligible recipients of QCDs, including field-of-interest funds, scholarships, designated funds and unrestricted funds. Although your client’s donor-advised fund is not a permissible QCD recipient under IRS rules, our team is happy to work with you and your client to establish another type of fund alongside an existing donor-advised fund and set in motion an overall strategy that meets both the client’s financial and estate planning goals as well as their goals for community impact.

The Answer:

Clearly, IRAs are tax-savvy savings vehicles during a client’s lifetime because contributions to traditional IRAs may be tax-deductible. Plus, the assets inside the account grow tax-deferred, allowing returns to compound. Leaving an IRA to charity at death, such as to a client’s fund at OCCF, is also tax-savvy. The assets avoid income tax because the charity, unlike heirs, can withdraw the funds tax-free. The assets also escape estate tax because charitable bequests are fully deductible from the taxable estate.

The Answer:

No! A special type of QCD allows your client to make a “split interest” gift to either a Charitable Remainder Trust (CRT) or Charitable Gift Annuity (CGA). The 2025 per-taxpayer limit for this so-called “legacy IRA” is $54,000. Note that the CGA option may be the most attractive option for your clients due to the significantly greater administrative burdens associated with setting up a CRT. 

Note: It’s important to understand the different tax treatment of an IRA-funded CGA. The gift will not generate a charitable deduction, and the lifetime income you receive from the CGA is fully taxable as ordinary income, unlike CGAs funded with cash or appreciated stock. Though it can help lower your AGI and fulfill your Required Minimum Distribution (RMD), it is not a perfect tax-savings vehicle.

Please reach out to the team at OCCF anytime. We are happy to set up a charitable giving plan that allows your client to make QCDs to help achieve their charitable goals.