Retirees have long been able to give to charity directly from an IRA and skip the income tax on that money. A new bill in Congress would extend the same option to 401(k) plans. For people who keep most of their savings at work, that change could open up a simpler way to give.
How Charitable Giving from Retirement Accounts Works Now
The tool at the center of this is the qualified charitable distribution, or QCD. If you are 70½ or older, you can transfer money straight from your IRA to a qualified charity. The amount is excluded from your taxable income, and it can count toward your required minimum distribution once you reach 73.
For 2026, the limit is $111,000 per person, and a married couple can each give that amount from their own accounts. A portion can also fund a charitable gift annuity or charitable remainder trust as a one-time election.
The Congressional Research Service confirms the current QCD limit and how the rules apply.
What the New Bill Would Change
Right now, QCDs can only come from IRAs. Money in a 401(k), 403(b), or similar workplace plan does not qualify. To use it, you first have to roll the funds into an IRA, which adds fees, paperwork, and delay.
The bipartisan Charity Parity Act, introduced in May 2026, would remove that step. It would let people 70½ and older send money directly from a workplace plan to charity, just as they can from an IRA today. Lawmakers from both parties introduced it in the House and Senate, and it could fold into a larger retirement bill.
Why This Matters for Donors
Many retirees hold the bulk of their savings in employer plans. Under current rules, those dollars are harder to give in a tax-smart way. The bill would close that gap.
A QCD often beats writing a check from a taxable account, for a few reasons:
- The gift is excluded from your income rather than claimed as a deduction.
- It works whether you itemize or take the standard deduction.
- It can satisfy part or all of your required minimum distribution.
- It can lower your adjusted gross income, which may reduce Medicare premiums.
Recent tax changes added limits on itemized charitable deductions, which makes the income exclusion from a QCD more appealing for some donors.
A Few Cautions
The bill is not law yet. It remains in committee, and its timing depends on whether Congress takes up a broader retirement package. Current rules also keep some limits in place. QCDs cannot go to donor-advised funds or private foundations, and the money must move directly to the charity. Receiving it yourself first disqualifies the gift. A charitable giving lawyer can help you fit these transfers into a broader plan and time them to do the most good.
At Estate Planning Pros, we help clients structure charitable giving so it supports the causes they care about while keeping taxes in check. If giving from your retirement accounts is part of your plans, this is a good time to review your options. An attorney can walk you through how a QCD fits your situation and what to watch for as the law develops.