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January 30, 2023

Enactment of the SECURE Act 2.0 brings some important changes for certain charities and donors

  • The Secure Act 2.0 expands the cap on qualified charitable distributions (QCDs) from IRAs.
  • The Secure Act. 2.0 allows some donors to make a one-time QCD to a split-interest entity such as a charitable gift annuity.

The split-interest vehicle donation provisions are effective in tax year 2023; the expanded QCD cap will be effective in tax year 2024.

The Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0, signed into law on December 29, 2022 as part of the $1.7 trillion omnibus spending deal (H.R. 2617) for fiscal year (FY) 2023, will have implications for the charitable sector and donors, tax-exempt entities with IRC Section 403(b) plans and investors in IRC Section 529 plans.

Provisions in the SECURE Act 2.0 of interest to tax-exempt organizations will generally:

  • Require new IRC Section 403(b) plans to automatically enroll participants upon becoming eligible
  • Allow IRC Section 403(b) plans to participate in Multiple Employer Plans (MEPs) and make the start-up tax credit more available to MEPs
  • Allow IRC Section 403(b) plans to offer unregistered collective investment trusts and separate account insurance products as plan investments
  • Provide a one-time election for a qualified charitable distribution (QCD) to a split-interest entity
  • Increase the QCD limitation
  • Allow tax-free, penalty-free rollovers from IRC Section 529 accounts to Roth individual retirement accounts (IRAs)

This Tax Alert focuses on the changes for QCDs, which could be significant.

Changes for QCDs

Under current law, a donor 70.5 years or older may give $100,000 per year to qualifying charities from the donor's IRA; the distribution can also satisfy the donor's required minimum distribution (RMD). An RMD is not recognized as income to the donor but does not qualify for a charitable contribution deduction under IRC Section 170. Changes made under the SECURE Act 2.0 annually index the $100,000 cap on this QCD for inflation for tax years after 2023.

Further, the SECURE Act 2.0 allows a donor 70.5 or older to transfer a QCD of up to $50,000 from a traditional IRA to a "split-interest entity" that will pay a fixed percentage (minimum 5%) for life to the donor and/or donor's spouse. A split-interest entity may be a charitable remainder unitrust, charitable remainder annuity trust or charitable gift annuity. The transfer does not qualify for a charitable contribution deduction, but it also does not cause the donor to recognize income on the rollover and allows the donor to satisfy all or part of the donor's RMD. Amounts received by the donor or donor's spouse under the annuity are taxable as ordinary income. The taxpayer may only make this transfer during one tax year for a maximum of $50,000; smaller amounts that together total no more than $50,000 can be transferred during the same tax year. The $50,000 cap will be indexed for inflation for tax years after 2023. These changes apply to distributions made in tax years beginning after the enactment of the new law — so, beginning with tax year 2023.


The SECURE Act 2.0 opens the door for tax-exempt organizations to receive increased funding from certain charitable vehicles and provides new incentives for donors to make charitable donations from their IRAs in 2023 and beyond. Tax-exempt organizations should consider sharing the new charitable-giving vehicles of the SECURE Act 2.0 with their donors.

Please contact your Ernst & Young tax professional with any questions.



— For more information about EY's Exempt Organization Tax Services group, visit us here.


Contact Information
For additional information concerning this Alert, please contact:
Exempt Organization Tax Services
   • Stephen Clarke (
   • Melanie McPeak (
   • Morgan Moran (
   • Cal Hoke (

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor