What is the one-time distribution limit allowed for qualified charitable distributions (QCD) under the SECURE 2.0 Act?

The correct distribution limit for qualified charitable distributions (QCD) under the SECURE 2.0 Act is set at $50,000. This provision allows individuals who are over the age of 70½ to make tax-free transfers from their traditional IRAs to qualified charitable organizations, thereby providing significant benefits to both donors and charities.

The increase to $50,000 is particularly notable as it demonstrates the intent of the legislation to encourage charitable giving among retirees, allowing them to contribute a meaningful amount while also potentially reducing their taxable income. This amount can be distributed to multiple charities or a single organization but cannot exceed the limit in aggregate for the specified tax year.

Understanding the mechanism of QCDs is essential as it facilitates tax-efficient charitable giving, helping individuals manage their retirement funds while fulfilling philanthropic goals.