Tongue twister: OBBBA, IRAs, QCDs, and FAQs
by SCF Team | September 1, 2025 | Siouxland Community Foundation Blog, Advisor Resources
If your head is spinning, you’re not alone! The rules for using IRAs to give to charity were already complicated before the One Big Beautiful Bill Act (OBBBA) came along. Our team at the Siouxland Community Foundation has been getting lots of questions from attorneys, CPAs, and financial advisors who are guiding clients through this new landscape. Here are answers to five of the most common FAQs:
“I have clients who are 70½ and older. Did the rules for Qualified Charitable Distributions change?”
Great question—and an important one. The short answer is no. The OBBBA did not change the IRS’s rules for Qualified Charitable Distributions (QCDs). In 2025, taxpayers age 70½ and older can still direct up to $108,000 from an IRA to an eligible charity, including certain types of funds here at the Siouxland Community Foundation.
“So what else should I know to guide these clients?”
QCDs are even more powerful after the OBBBA. That’s because they bypass the new 0.5% adjusted gross income floor that will apply to itemized charitable deductions in 2026. They also avoid the new 35% cap on deduction value for high-income taxpayers. Since QCDs reduce taxable income directly without requiring itemization, they give retirees a straightforward way to maximize their charitable impact in what will soon be a more restrictive tax environment.
“When should I reach out to SCF about a client who’s a good QCD candidate?”
Anytime! Several types of funds at SCF can receive QCDs, including field-of-interest funds, designated funds, and unrestricted funds. (Note: donor-advised funds are not eligible QCD recipients under IRS rules.) Our team can help you and your client explore setting up a complementary fund alongside a donor-advised fund, ensuring both financial/estate planning goals and charitable goals are met.
“Why are IRAs such powerful legacy gifts?”
IRAs are already tax-smart savings vehicles during a client’s lifetime, thanks to deductible contributions and tax-deferred growth. At death, leaving an IRA to a fund at SCF is even smarter: the assets pass tax-free to charity, avoiding both income and estate taxes. That means more impact for the community and less tax burden for heirs.
“Does the whole QCD have to go directly to charity?”
Not necessarily. A special type of QCD allows clients to make a “split-interest” gift to a charitable remainder trust (CRT) or charitable gift annuity (CGA). For 2025, the per-taxpayer limit for this so-called “legacy IRA” gift is $54,000. In practice, the CGA option may be most appealing for clients, since CRTs come with heavier administrative requirements.
At the Siouxland Community Foundation, we’re here to help you and your clients make sense of it all. Please don’t hesitate to reach out—together, we can craft charitable giving strategies that use QCDs to achieve lasting impact in Siouxland.
