The SECURE Act

If you are 70 ½ or older, you may be eligible to make qualified charitable contributions (QCDs) from your IRA or qualified retirement plan, while lowering your tax burden and supporting our mission to be the leader in improving child health.

Recent changes to required minimum distribution (RMD) rules may have tax implications for you. The new SECURE Act of 2019 (Setting Every Community Up for Retirement Enhancement) was enacted December 20, 2019 and became effective January 1, 2020. The law continues to allow you to make qualified charitable distributions from your IRA if you are 70 ½ or older, however, it now delays the mandatory withdrawal age to 72. Here are the specifics:

• For individuals who turn 70 ½ after December 31, 2019, the required minimum distribution age is increased to age 72. Those who reached age 70 ½ before or during 2019 must still take RMDs under the previous law.
• IRA balances may, as a result, be larger with one or two years of added growth.
• Larger RMDs for people who are 72 or older will also mean more taxable income for you.
• Making a qualified charitable distribution of up to $105,000 per year, per individual may help relieve your increased tax burden, and provide a tax-smart giving strategy for you to support the causes you care about.

In addition to changing RMD rules, the SECURE Act also repealed the stretch IRA payouts to beneficiaries other than spouses and certain eligible designated beneficiaries. Under this new legislation, beneficiaries can no longer "stretch" distributions from inherited IRAs based on the heir's life expectancy. Now the law requires inherited IRA funds be distributed over a 10-year period.

The legacy planning team at Cincinnati Children's can help you devise tax-smart ways to support Cincinnati Children's, while lessening the tax burden for your heirs. Contact us today!

This is provided for informational purposes only. Please consult with your tax advisor for details on how the SECURE Act impacts you.