Planned Giving Insights and Information

IRS Announces Tax Schedules, Exemptions, and QCD Limits for 2025

Many federal tax items are indexed annually for inflation, such as the income tax brackets for individuals and trusts, the standard deduction, the gift and estate tax exemption, and qualified charitable distribution (QCD) limits. The IRS recently announced what the new amounts will be for all 63 of these items in 2025. The new values will increase about 2.8% over the 2024 values they will replace. All of these changes are minor and should have little effect on the tax incentives that encourage donors to make charitable gifts.

ACGA Rates Remain Well Below NY Maximum Annuity Rates

New York has announced its maximum one-life annuity rates applicable to immediate gift annuities issued to New York donors from July 1, 2024 through December 31, 2024. All these rates remain well above the corresponding maximum annuity rates suggested by the American Council on Gift Annuities (ACGA). New York does not publish its maximum annuity rates for two-life immediate gift annuities, nor for one-life or two-life deferred gift annuities. However, PG Calc is able to compute these New York maximum rates ourselves, and we have spot-checked these rates over a range of typical ages and deferral periods. In every case, the NY maximum rate is well above the corresponding ACGA rate.

New York Maximum Annuity Rates Have Increased Significantly

(Updated February 13, 2024) Governor Hochul signed New York Bill A4599a on October 25, 2023. The new law revises how New York computes its maximum annuity rates for gift annuities issued to New York residents and went into effect 90 days after signing, which is to say, on January 23, 2024. New York has now published the maximum rates applicable for gift annuities funded January 1, 2024 – January 22, 2024, during which the old method still applies, and for gift annuities funded January 23, 2024 – June 30, 2024, during which the new method applies. (The new law calls for updating the New York rates semiannually rather than quarterly.) As expected, switching to the new method increases New York’s maximum annuity rates significantly. The table below compares old and new New York maximum rates with American Council on Gift Annuities (ACGA) suggested maximum annuity rates over a range of typical gift annuitant ages. The columns on the far right show that New York’s new single life maximum...

Analysis of the New 2024 ACGA Annuity Rates

On November 22, 2023, the American Council on Gift Annuities (ACGA) informed its members that it would be increasing its suggested maximum annuity rates, effective January 1, 2024. The ACGA made its 2024 rates public earlier today, December 26. The 2024 rates replace the rates that became effective January 1, 2023. The ACGA’s decision to increase its suggested maximum gift annuity rates was triggered by the sharp rise in interest rates between May and November 2023. A net investment return assumption of 4.75% underlies the ACGA’s 2024 rates, an increase from 4.25%.