Secure Act 2.0 Retirement Provisions

On December 29, 2022, the president signed into law the 2023 omnibus appropriations bill. The bill contains Secure Act 2.0 retirement provisions and an expansion of the rules for qualified charitable donations (QCDs). A QCD is a direct transfer of funds from an Individual Retirement Account (IRA) to a qualified charity. QCDs can be counted toward satisfying required minimum distributions (RMDs) for the year if certain rules are met.

Here are highlights of the law updated to reflect rules for the 2024 tax year:

Increase in QCD limit: In 2024, individuals who are 70½ years old or older may use a QCD to donate up to $105,000 to qualified charities directly from an IRA. This change from the initial $100,000 IRA QCD limit set for tax year 2023 reflects Section 307, which indicated the limit will be annually indexed for inflation. The bill did not indicate any change to the current QCD age and QCDs continue to be ineligible for a donation to donor-advised fund sponsors, private foundations, or supporting organizations.

Increase in IRA RMD age: The age for required minimum distribution (RMD) from an IRA is increased to 73 effective on January 1, 2023, and again to 75 starting on January 1, 2033. (IRA owners turning age 72 in 2023 would not be required to take RMDs in 2023.)

One-time, split-interest election: Section 307 includes a one-time election for a QCD to a split-interest entity. In 2024, this indicates an ability for donors to make a QCD of up to $53,000, up from a limitation of $50,000 in 2023. This QCD can fund one of either a Charitable Remainder Unitrust (CRUT), Charitable Remainder Annuity Trust (CRAT) or Charitable Gift Annuity (CGA).