CARES Act and Your Gifts

CARES Act and Your Gifts to Our Congregation

CARES Act Changes:

On March 27, 2020, the Coronavirus Aid, Relief, And Economic Security (CARES) Act was signed into law. This legislation was designed to provide crisis relief to individuals, businesses, charities, and other entities impacted by the COVID-19 crisis. The CARES Act included several measures designed to enhance charitable giving including options that may help you maximize your charitable gifts:

1. Taxpayers who utilize the standard deduction are allowed an above-the-line deduction of up to $300 ($600 for a married couple) for charitable contributions of cash by individuals made after December 31, 2019. This is particularly beneficial to people who take the standard deduction when filing their taxes (in other words for taxpayers who do not itemize their deductions). It is calculated by subtracting the amount of the donation from your gross income. It is an “above the line” adjustment to income that will reduce your AGI, and thereby reduce taxable income. This provision applies to most qualified charitable contributions but not to donor-advised funds of 509(a)(3) organizations. This is applicable for tax years beginning after 2019 and does not sunset after 2020 like the increased limits described below.

2. For charitable gifts of cash, the overall percentage of adjusted grow income (AGI) limitation is increased to 100% for individual taxpayers for the tax year 2020. Gifts of appreciated assets are generally deductible up to 30% and may be combined with cash gifts up to the 2020 maximum of 100% of AGI. Excess amounts may be carried over for use in future years. The 10% of AGI limitation for corporate contributions is increased to 25% for the tax year 2020; contributions of food inventory are also increased to 25% (the deduction is normally limited to 15%). Note, that like the first provision, these provisions apply to most qualified charitable contributions but not to donor-advised funds or 509(a)(3) organizations.

3. Those of age 70½ or older with an IRA may still make tax free qualified charitable deductions (QCDs) to charity, even though required minimum distributions are suspended through the end of the year. Donors directing a QCD to charity this year (up to $100,000 per individual) will still reduce their taxable IRA balance. This allows all taxpayers, itemizers and non-itemizers alike, to direct gifts from their IRA to charities in a tax-efficient manner.

Looking Ahead:

After considering your immediate needs and concerns, you may also want to review your long-range gift, estate, and financial plans to make sure they still reflect your current wishes for your family, friends, and church.

As you and your advisors explore the impact the CARES Act has on your personal plans, you may discover new ways to balance your family’s financial needs with your commitment to generosity today and into the future.

We thank God for your ongoing support for our ministries.

Please contact Stephan Jones, our Director of Finance, to discuss current Ministry Plan giving, or the Rev. Shawn Lewis-Lakin, our Planned Giving Pastor to discuss your generosity legacy.

We thank God for your ongoing support for our ministries.

Note: The purpose of the information provided on this page is solely educational, namely, to provide general gift, estate, financial planning, and related information. It is not intended as legal, accounting or other professional advice, and you should not rely on it as such. Appropriate professional and/or legal services should be obtained in planning charitable gifts and developing estate planning strategies and documents.