Impact on Charitable Giving in the One Big Beautiful Bill Act
Breaking News: Late Monday, June 16, 2025, the Senate Finance Committee released its proposed revisions to the One Big Beautiful Bill Act. Among the proposed changes are:
A permanent non-itemizer charitable deduction ($1,000 for individuals/$2,000 for joint filers).
Adding a 0.5% floor on charitable deductions for itemizers.
Extending and making permanent the 60% AGI cap on the charitable deduction.
Removing the increased net investment tax on private foundations.
Reducing the scaled excise tax on investment income of private colleges to a maximum of 8%.
On May 22, 2025, the House of Representatives passed HR 1, “The One Big Beautiful Bill Act” by a vote of 215 to 214. Now, the Senate is considering the 1,038-page bill and proposing changes which will go back to the House for further consideration. Under the regular order, this back-and-forth process will continue until both chambers reach agreement on a final bill. We’re still a long way from knowing exactly what might be signed into law. Nevertheless, here is a summary of some of the provisions – as passed by the House – that could affect charitable giving.
Just starting to consider registering in states to issue gift annuities, or perhaps revisiting it as a recurring topic? Puzzling over a particular CGA annual filing requirement? Get all your charitable gift annuity state registration and annual filing questions answered for free by PG Calc experts Edie Matulka, Director, Regulatory Compliance, and Julie Goldenberg Hay, Senior Advisor, Regulatory Compliance, during this hour-long webinar. As an attendee commented the last time we gave this session, think of this as your CGA therapy hour!
From the Blog: Dancing with the Taxman – Tax Reporting of Qualified Charitable Distributions
Also From the Blog: Flexible Joints – Concurrent and Consecutive Joint Annuitants
CGP Announces New IRA Charitable Beneficiary Law Passed in Indiana
Annuity Reserves and State Reserve Reporting
Fall Is BatchCalcs Season – Start Planning Now!
Boost Your Gift Planning Skills at Our In-Person August Software Trainings in Boston This Summer
Quick Tip: Mask First Names in Compliance Reports
If you are sharing your state gift annuity reserve or FASB liability reports between departments, receiving them from a custodian, or transmitting them to a state, it’s a good idea to mask the first names of the annuitants or beneficiaries. The latest release of GiftWrap makes masking first names quick and easy.
On the GiftWrap toolbar, select Compliance.
Select the Gift Annuity Reserves State Method or FASB Liabilities report.
Under Report Format select State Reserves – without first name or FASB Liabilities – without first name.
The report will export with no first name visible.
Contact Client Services at support@pgcalc.com or at 888-474-2252 if you need help.
From the Blog: Dancing with the Taxman – Tax Reporting of Qualified Charitable Distributions
The Qualified Charitable Distribution (QCD) from an IRA has become a popular way for donors who are 70 ½ or older to make charitable gifts. Financial advisors routinely tell their clients that charitable gifts via a QCD are a tax-smart way to make those gifts. Unfortunately, QCD donors have found the guidance on how to report QCDs on their tax returns muddled.
For the tax year 2025, the IRS has introduced a new code, Code Y, for Box 7 of Form 1099-R. This code enables an IRA administrator to identify a distribution as a QCD, allowing it to differentiate QCDs from other types of distributions.
Also From the Blog: Flexible Joints – Concurrent and Consecutive Joint Annuitants
The payout rate for a joint annuity or a two-life annuity is calculated based on the joint life expectancy of the two annuitants. The CGA agreement will specify if the joint annuitants receive annuity payments concurrently (at the same time) or consecutively (one after the other). Annuity payments for concurrent annuitants continue for the lifetime of the surviving annuitant. When one annuitant dies, the annuity payments continue to be paid to the surviving annuitant for life. Annuity payments for consecutive annuitants are made to the first annuitant for his/her/their lifetime, and the payments will continue to the second annuitant for life if the second annuitant survives the first annuitant.
The choice between concurrent and consecutive/successive joint annuitants may focus on income tax considerations, such as capital gains and charitable deductions, for the donors and the annuitants.
CGP Announces New IRA Charitable Beneficiary Law Passed in Indiana
Last month, the National Association of Charitable Gift Planners shared news that Indiana State House Bill 1081 was successfully passed into law on May 6, 2025. The new law was modeled on a similar Iowa law championed by CGP's RIFT (Release IRA Funds Timely) Project, led by Johni Hays, JD. According to the announcement, “the law provides that if a charitable organization is designated as the beneficiary of an individual retirement account, retirement account, brokerage transfer on death account, annuity, or life insurance policy, a financial institution or insurance company in control of the funds must transfer the funds directly to the charitable organization without requiring certain conditions to be satisfied, if the charitable organization submits a certain affidavit.”
Under the new law, the institution controlling the funds cannot require the following before disbursing funds designated for the charity: a) that the charity provide personal information of any employee, officer, or agent of the charity, or b) that the charity open an account or otherwise become a customer of the institution. The goal is to enable charities to receive funds designated for them from a variety of financial accounts with less red tape and delay.
Annuity Reserves and State Reserve Reporting
Annuity reserves are the assets a charity needs in order to finance its gift annuity payment obligations. The amount of reserves needed to finance each gift annuity depends on the size of the annuity payments, the ages of the annuitants, the payment frequency, and the mortality table and interest rate used.
Many charities compute annuity reserves for their financial reports to make sure that they have ample funds on hand to make annuity payments now and in the future. State reserve reports and FASB reports can both be used as an important health check for your gift annuity program when assessed against the market value of your annuity pool.
If you register your gift annuity program with certain states, calculating the annuity reserve tips from a best practice to an annual requirement. Many states that regulate gift annuities require charities to submit annuity reserve reports annually. In addition, some states, including California and New York, require charities to maintain a minimum reserve to back their gift annuity payment obligations, making the calculation of the annuity reserve even more important.
The amount required to be held in the fund is generally calculated based on an actuarial methodology (standard valuation law), utilizing mortality tables and interest rates that vary from state to state. In addition, certain states require a surplus, which can either be a dollar amount or a percentage of the total reserve. Of the fifty states, ten have published rules for annuity reserve calculations: Arkansas, California, Florida, Hawaii, Maryland, New Jersey, New York, Oregon, Tennessee and Washington.
If you are either interested in calculating your annuity reserve, or required to do so, PG Calc can partner with you in a number of ways to make reporting easier:
GiftWrap’s Compliance module produces state reserve reports with a few mouse clicks. When you choose the state for the reserve report, GiftWrap automatically selects the mortality tables and other factors required by that state, and allows you to add a surplus to the calculation if warranted. It also allows you to separate your general pool from your California state reserve pool.
PG Calc’s Client Services team is available to run your state reserve reports using your data and our instance of our GiftWrapsoftware. Pricing information can be requested by emailing support@pgcalc.com.
PG Calc’s Gift Administration team provides state reserve reporting as part of both its Basic service, and its Basic + Payment service. Both levels also include FASB calculations, gift summaries, the issuing of 1099-Rs to your annuitants, and 1099-R submission to the IRS. Pricing information for both levels of service can be requested by emailing info@pgcalc.com.
Even if you don’t register your annuity program, it’s still a good idea to review your annuity reserves as part of your annual reporting. When in doubt, use the most conservative state’s reserve requirements as your guide: New York’s. Attention to the New York rules includes their required surplus, which is the highest by far amongst the other states. Other state methodologies could potentially result in a higher calculated reserve before surplus, but New York’s surplus would close and surpass any gap.
Fall Is BatchCalcs Season – Start Planning Now!
Fall is a critical time to engage with your donors as they plan their year-end giving. It is the perfect moment to show your prospects how a gift annuity can provide valuable support to your organization and deliver steady payments to themselves or loved ones for life.
That’s where PG Calc’s BatchCalcs service comes in. With BatchCalcs, you can deliver custom gift annuity calculations to each donor on your mailing list. Show each one the deduction, annuity, and tax-free portion they can expect to receive when they give a specified amount, for example.
If you are looking to solicit gift annuities, BatchCalcs is a powerful tool for personalizing your mailing campaign. Start planning your fall BatchCalcs mailing this summer!
Boost Your Gift Planning Skills at Our In-Person August Software Trainings in Boston This Summer
Join us in Boston for in-person gift planning training this August. We will be holding Gift Planning with PGM Anywhere Introductory on Wednesday, August 13 and the Advanced class on Thursday, August 14. Learn from PG Calc’s experts and from your peers at either session or both.
Classes will be held at the Wyndham Boston Beacon Hill both days from 9:00 am - 4:00 pm. Hotel rooms will be available at a discounted group rate of $240/night until July 13, so register now:
Gain invaluable hands-on experience using case study examples to illustrate gift options while discovering the powerful and effective features of your gift planning software. This class is taught using PGM Anywhere, our web-based gift illustration software.
This full-day seminar explores gift planning beyond the basics. We will review advanced gift planning techniques, including retained life estates, charitable lead trusts, and estate planning models using the flexible functionality of PGM Anywhere.
PG Calc • 129 Mount Auburn Street • Cambridge • MA • 02138
