April 15, 2026
Many of our clients are looking for the most tax-efficient ways to support the causes they care about. While recent federal tax law changes—including the new 0.5% AGI floor and the 35% cap on the value of itemized deductions—have made traditional charitable gifting more complex, the Charitable IRA Rollover (technically known as a Qualified Charitable Distribution or QCD) remains one of the most powerful tools in a Wisconsin estate planner’s toolkit.
How a Charitable IRA Rollover Works
If you are age 70½ or older, you can instruct your IRA custodian to transfer funds directly to a qualified 501(c)(3) nonprofit. Because the money goes directly to the charity, it never enters your bank account and is not counted as part of your taxable income.
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The Key Advantages of a Charitable IRA Rollover
The beauty of a QCD is its simplicity and its ability to bypass several tax hurdles:
- Satisfy Your RMD: If you are age 73 or older, a QCD counts toward your Required Minimum Distribution (RMD) for the year.
- Tax-Free Impact: Since the distribution is excluded from your gross income, you essentially receive a “100% deduction” regardless of whether you itemize or take the standard deduction.
- Avoid New Limitations: Unlike regular cash gifts, QCDs are not subject to the 2026 0.5% AGI floor or the 35% deduction cap for high earners.
- Lower Your AGI: By keeping this income off your tax return, you may also reduce your exposure to higher Medicare premiums (IRMAA) and taxes on Social Security benefits.
Current Limits and Rules
For 2026, the annual limit for QCDs has been adjusted for inflation to $111,000 per person. If you are married, you and your spouse can each contribute from your respective IRAs for a total of $222,000.
It is important to note a few limitations:
- The funds must come from a Traditional or Inherited IRA (not an active 401(k) or 403(b)).
- The gift cannot be made to a Donor-Advised Fund (DAF) or a Private Foundation.
Take Advantage of Charitable IRA Rollovers
As Wisconsin estate planningPlanning in advance of disability, incapacity, or death to make sure that key life issues have been addressed while the person is still of sound mind and able to understand and sign key documents such as Power of Attorneys, Power of Attorneys for Health Care, Wills, and Trusts to form a strategy and provide for the administration and disposition of his or her assets upon death or upon incapacity. More attorneys, we are deeply familiar with charitable IRA rollovers. For years, we have been helping our clients take advantage of these tax-efficient tools to support their beloved causes and nonprofits. We invite you to contact our firm to see if these powerful estate planningPlanning in advance of disability, incapacity, or death to make sure that key life issues have been addressed while the person is still of sound mind and able to understand and sign key documents such as Power of Attorneys, Power of Attorneys for Health Care, Wills, and Trusts to form a strategy and provide for the administration and disposition of his or her assets upon death or upon incapacity. More tools is right for your needs and goals.