New bipartisan bill would let retirees use their 401(k) to make direct charitable donations

Jose Luis Pelaez Inc | Digitalvision | Older Americans could get another way to make tax-free charitable donations from their retirement savings under a new bipartisan, bicameral bill in Congress . Called the Charity Parity Act and introduced in both the House and Senate on Wednesday, the measure would allow so-called qualified charitable distributions, or QCDs, to be made from 401(k)s and similar workplace retirement plans. Under current law, QCDs — only available to people age 70½ or older — must be from an individual retirement account directly to a qualifying nonprofit. This means that if you want to use money from your 401(k) to do a QCD, the amount must first be rolled over to an IRA.