The CARES Act (Coronavirus Aid, Relief, and Economic Security Act) was passed in March 2020. When most people think of this legislation, they think about Economic Impact payments and loans for small businesses. However, there are also some significant provisions around charitable giving that may benefit you and help you support the organizations you love.
What it All Means
For Non-Itemizers
If you take the standard deduction when you file your federal taxes, the CARES Act gives you a $300 above-the-line deduction for cash donations. What does that mean? Your donation of up to $300 will be deducted from your adjusted gross income (AGI). This happens before you take the standard deduction. But, because this deduction is limited to cash contributions, gifts to a donor advised fund and complex gifts of stock or other assets do not qualify for this deduction.
For Itemizers
For folks who itemize their deductions, you’re normally limited to deducting 60% of your AGI. The CARES Act waives that limit for cash donations. While there’s still a deduction limit of 100% of your AGI for the 2020 tax year, any cash donations above and beyond that may be carried over as deductions for up to five years. Because this exception is only for cash donations, there remain certain limits on deductions for other gifts, like stock or personal property. And, there are still deduction limits for contributions to a donor advised fund.
For Tax Advisors: View our webinar and resources on the CARES Act and philanthropy >>
Next Steps
For Non-Itemizers
If you likely won’t itemize your tax deductions for 2020, consider a gift to the 2020 Spring Grant Cycle match opportunity which supports immediate needs and vital programs all over our diocese. There is currently a 1:1 match for all gifts toward this $500,000 match! Learn more >>
Or, consider a cash gift to your parish’s endowment, or an endowment for another organization you love. See our full list of funds >>
For Itemizers
Consult with your tax advisor to determine an appropriate and effective solution for your unique tax situation. A gift to the 2020 Spring Grant Cycle match opportunity will support immediate needs and vital programs all over our diocese. There is currently a 1:1 match for all gifts toward this $500,000 match! Learn more >>
For some, a family fund might be an appropriate solution. Donors who will give large sums but would like their gifts to support the charities they love over a longer period of time (instead of giving a huge amount in one lump sum) may consider a custom family fund. This fund might be an endowment, which grants in perpetuity, or a fund with a more aggressive granting timeline. There are many different ways to customize these funds, so please contact us to discuss this option.