Congress Introduces Bill Letting 401(k) Savers Give Up to $111,000 Tax-Free to Charity
Updated
Updated · CNBC · May 18
Congress Introduces Bill Letting 401(k) Savers Give Up to $111,000 Tax-Free to Charity
2 articles · Updated · CNBC · May 18
$111,000 is the 2026 annual QCD cap that older Americans could send directly from 401(k)s and similar workplace plans under the new bipartisan House and Senate bills.
Current law limits qualified charitable distributions to IRAs for people age 70½ and older, forcing 401(k) holders to roll assets into an IRA before donating directly to a nonprofit.
That extra withdrawal-and-donation route can raise adjusted gross income, potentially increasing Medicare Part B and Part D premiums, while QCDs are excluded from income and can satisfy required minimum distributions starting at age 73.
The Charity Parity Act was sent to the House Ways and Means Committee and Senate Finance Committee, with supporters framing it as a modernization of retirement rules rather than a major new tax break.
The push comes as more retirees keep assets in employer plans—only 2% of 401(k) plans require money to be moved out by age 65 or 70, down from 4% in 2014.
Will simplifying 401(k) donations unlock billions for charity or introduce new risks for retirees?
With billions in donor-advised funds, should they be the next destination for tax-free retirement gifts?
As 401(k)s gain new powers, are we making retirement plans too complex for savers to manage?