The Coronavirus Aid, Relief, and Economic Security Act Releases Restrictions on Giving
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is a sweeping $2 trillion stimulus bill passed by Congress in response to COVID-19. This Act provides immediate relief with grants and loan forgiveness programs, as well as encourages individuals of economic levels to participate in the American tradition of charitable giving.
The CARES Act:
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Provides 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 charitable organizations. The provision is intended only for the year 2020; however, in the text of the bill, it states taxable years “beginning in 2020 …” and does not include a sunset date, thus it conceivably could extend beyond 2020. The deduction is ONLY for gifts of cash made in calendar year 2020 and does not cover other types of gifts or contributions made to donor-advised funds or private foundations.
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Suspends the 60 percent adjusted gross income limitation for individuals’ charitable contributions for the year 2020. In a typical year, individuals can only take a charitable deduction of up to 60 percent of their adjusted gross income, no matter how much they give. For 2020, there is no limit, making cash contributions fully deductible.
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Increases the cap on how much 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.
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Waives for 2020 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. This change reduces the incentive for donors to make gifts from their individual retirement account (IRA)—the IRA Rollover Provision
If you would like to become a member, renew you’re your membership or donate to the Museum’s Annual Fund, NOW is the best time. Please contact Alex Wiltberger (awiltberger@museumofthenewsouth.org 734-546-2614) for any questions.
*** Levine Museum of the New South does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Donors should consult their own tax, legal, and accounting advisors before engaging in any transaction.