The CARES Act 2020
The CARES (Coronavirus Aid, Relief, and Economic Security) Act provides temporary relief for charities and enhanced giving opportunities for donors who make cash gifts in calendar year 2020.
Enhanced Giving Opportunities:
- Temporary Universal Charitable Deduction: Taxpayers who DO NOT ITEMIZE their deductions can take a one-time deduction of up to $300 for gifts made to a 501(c)(3) public charity, such as Parkview Baptist School and Parkview Baptist Church. The deduction is ONLY for CASH (including checks and credit card transactions) and does not cover other types of gifts or contributions made to donor-advised funds or private foundations. Because the CARES Act deduction is a universal above-the-line deduction, you can list your contribution as an adjustment to income on your taxes.
In short, with the CARES Act, if you donate up to $300 in cash to Parkview before December 31, 2020, your adjusted gross income will be reduced up to $300.
- Suspends the 60 percent adjusted gross income limitation for individuals’ charitable contributions for the year 2020. In a typical year, individuals who itemize can only take a charitable deduction of up to 60 percent of their adjusted gross income, no matter how much they give. A donor can fully deduct gifts equal to as much as 100% of their adjusted gross income in 2020.
- Increases the cap on how much businesses/corporations may deduct for charitable gifts from 10 percent of taxable income to 25 percent. In addition, the limitation on deductions for food donations by corporations increases from 15 percent to 25 percent in 2020.
- Suspends the required minimum distributions from retirement plans, such as pensions and 457 plans. Any minimum distributions from retirements plans that would have been required in 2020 can be delayed until 2021. Charitable donations made through a qualified charitable distribution (QCD) is still a smart and tax-effective way to donate to Parkview. These transfers do not generate taxable income nor a tax deduction. You benefit whether your itemize or not.
As always, please consult with your tax adviser for their recommendations on what giving options would be best for your personal circumstances.
Resources used to prepare this information:
The entire CARES Act can be found here: https://www.congress.gov/116/bills/hr748/BILLS-116hr748eas.pdf
To learn about all giving options at Parkview, please contact Director of Development Michelle White at 225-291-2500, ext. 125 or email@example.com.