IRAs, RMDs, and QCDs

January 11, 2021

2020 brought with it a waiver of Required Minimum Distributions via the CARES Act in response to the Coronavirus pandemic. Absent legislation to the contrary, RMDs will make their return in 2021. As a reminder, though, when the CARES Act was signed in early 2020, the ink was barely dry on the late-2019 SECURE Act, which increased the beginning age for RMDs from 70½ to age 72.

While the beginning age for RMDs was increased to 72, the age at which a person can begin making Qualified Charitable Distributions from their IRA directly to charity remains 70½. QCDs can play a strategic advantage in charitable giving and tax planning, as one avoids paying tax on what would otherwise be a taxable distribution, and QCDs count toward one’s RMD.

Two paragraphs hardly seems enough real estate for the above topics, so please be in touch should you have questions or wish to discuss planning opportunities.