If your head is spinning, you are not alone – the rules for using IRAs in charitable giving were already complex, and the One Big Beautiful Bill Act (OBBBA) added a few new wrinkles.

We have rounded up five of the most common questions we hear from San Antonio Area Foundation supporters:

1. Did the OBBBA change the rules for Qualified Charitable Distributions (QCDs)?

Short answer: No.

Taxpayers age 70½ and older can still direct up to $108,000 (per taxpayer, 2025 limit) from an IRA to an eligible charity, including certain types of funds at the Area Foundation. The IRS rules for QCDs remain the same, but how they fit into overall planning has changed (see below).

2. How does the OBBBA make QCDs even more valuable?

QCDs have become even more powerful under the OBBBA because:

  • Bypassing the new AGI floor – starting in 2026, itemized charitable deductions will be subject to a 0.5% adjusted gross income floor (QCDs are not affected).
  • Avoid the 35 percent deduction cap – high-income taxpayers will face a 35 percent limit on the value of their itemized charitable deductions (QCDs remain fully tax-free).
  • Reduce taxable income directly – unlike itemized gifts, QCDs lower adjusted gross income without requiring clients to itemize.

Bottom line: QCDs allow retirees to maximize charitable impact in a more restrictive tax environment.

3. When should I involve the Area Foundation?

Early and often.

The Area Foundation can help you explore QCD-friendly strategies. Several types of funds can receive QCDs, including:

  • Field-of-interest funds.
  • Designated funds.
  • Unrestricted funds.

Important: Donor-Advised Funds (DAFs) cannot accept QCDs under IRS rules. However, we can work with you to establish an additional eligible fund alongside your DAF to support an overall charitable plan that meets your financial, estate and philanthropic goals.

4. Why are IRAs such powerful legacy gifts?

IRAs are uniquely tax-efficient for charitable giving, both during life and at death:

  • During life – contributions to traditional IRAs may be tax-deductible, and account assets grow tax deferred.
  • At death – leaving an IRA to a fund at the Area Foundation avoids both income tax and estate tax:
    • Charities can withdraw IRA funds tax-free, unlike heirs.
    • Charitable bequests are fully deductible from the taxable estate.

For families focused on long-term impact, IRAs are one of the most efficient ways to support the causes you care about.

5. Does the entire QCD have to go directly to charity?

No. The OBBBA preserved the option for a “split-interest” QCD through what is called a Legacy IRA gift:

  • Families can direct up to $54,000 (per taxpayer, 2025 limit) from an IRA to fund either:
    • A Charitable Gift Annuity (CGA) is typically the simpler option.

Or

  • A Charitable Remainder Trust (CRT), more complex and requires additional administration.

This approach allows families to support charity while also creating a stream of income for themselves or loved ones.

Final Takeaway

The OBBBA introduced new planning opportunities, and QCDs remain one of the most versatile and impactful tools for charitable giving. By involving the Area Foundation early, you can help create strategies that maximize tax savings, support meaningful causes, and leave a lasting legacy. Never hesitate to reach out to us with any questions or to discuss your clients’ philanthropic interests and goals.

David Simmons serves as Wealth Advisor Relations Manager with the San Antonio Area Foundation’s Development and Donor Services Department. He can be reached at dsimmons@saafdn.org.