CARES Act & Your Donations
We want to let you know about a few key provisions of the new CARES (Coronavirus Aid, Relief, and Economic Security) Act. This new law is designed to help you, businesses, and nonprofits facing economic hardship during the coronavirus pandemic.
On March 27, the Coronavirus Aid, Relief, and Economic Security Act or CARES Act, was signed into law and made changes to encourage charitable giving to nonprofits. This bill includes a new above-the-line deduction for non-itemizers and modified certain limitations on the income tax charitable deduction to encourage donors to give in 2020. This targeted relief recognizes the important role charities play during the pandemic and provides additional tax benefits for taxpayers supporting charities.
Requirements for Required Minimum Distributions (RMD's) Temporarily Suspended
The new law temporarily suspends the requirements for required minimum distributions (RMD) for the 2020 tax year. This probably comes as a relief to many of you who would have had to withdraw a greater percentage of your retirement accounts. Many of our donors use their RMD to make a gift from their IRA. If you are 70½ or older, you can still make a gift from your IRA or name us as a beneficiary. In addition, there are some new ways you can receive financial benefits and help organizations like us.
Charitable Deduction Up to $300 Above the Line
The new law allows all taxpayers to take a charitable deduction of up to $300, even if you do not itemize. You might think that this is a small amount and would not make a difference. But what if all of our donors gave “just” $300? Such support would have a huge impact on those we serve.
100% Deductions for Itemized Cash Contributions
For those who do itemize their deductions, the new law allows for cash contributions to qualified charities such as ours to be deducted up to 100% of your adjusted gross income for the 2020 calendar year. Deductions for cash donations were previously limited to 60% of the taxpayer’s AGI.
Corporations’ 10% Limit Increased to 25% for 2020
For the 2020 tax year, corporations can deduct up to 25% of the taxpayer’s taxable income for any cash contributions made to qualified charitable organizations. Deductions for cash donations were previously limited to 10% of the taxpayer’s taxable income.
Charitable contributions carried over from a prior tax year (before 2020) are excluded from this temporary relief and are subject to previous limitations in the tax code. And charitable contributions to private non-operating foundations, supporting organizations and sponsoring organizations to fund donor advised funds do not qualify for the modified percentage limitations for 2020.
We are so grateful for your generosity, which touches—and changes—so many lives. Please contact Katy Motsinger at email@example.com or 803-372-6841 to discuss how your gift can help further our mission. You can make a donation today at attentionhome.org/give. Please talk with your accountant to learn more about the CARES Act specifically.
*The Children's Attention Home does not provide professional legal or financial advice, and donors should consult with their own advisors to ascertain how these opportunities may complement their own personal, philanthropic and tax planning objectives.
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