Planned Giving

The CARES Act and Provisions Impacting Charitable Giving

The CARES ACT (Coronavirus Aid, Relief, and Economic Security Act) was signed into law on March 27, 2020, followed by another stimulus package on December 20, 2020 which extended many of the charitable giving tax incentives. These acts seek to alleviate economic hardship that has resulted from the coronavirus pandemic. Some key provisions that might help in your charitable giving are:

Higher Deduction Limits: Extended for the year 2021, this provision allows individuals to deduct cash contributions made to qualified charitable organizations of up to 100% of their adjusted gross income (AGI). The limit was 60% prior to the CARES Act.

Extended $300 Charitable Deduction for Non-Itemizers: Also extended is the provision that enables taxpayers who take the standard deduction to claim an above-the-line tax deduction for a total of $300 in qualified cash donations on their tax return.

Required Minimum Distributions Resume for 2021: For the year 2020, the CARES Act temporarily waived the mandate for those who are normally required to take their Required Minimum Distributions (RMDs). However, for 2021, the RMD mandate has resumed for those 72 and older. For many in this range, the IRA Qualified Charitable Distribution (QCD) may be a smart way to make a charitable gift. It is a charitable gift of funds from an IRA of up to $100,000 transferred direct to the church, without taking the distribution into taxable income. While the age one must take an RMD is 72, those givers 70 1/2 or older are eligible to make this gift.