On Friday, March 27, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This $2 trillion economic stimulus package contains components that may affect your charitable giving in 2020.

Are you a non-itemizer? The CARES Act allows a partial above the line deduction for charitable contributions which allows non-itemizers to be able to take a charitable deduction (Section 2204). Taxpayers who take the standard deduction rather than itemizing their deductions will be able to claim a charitable deduction of up to $300 ($600 for a married couple) for cash donations made in 2020. This is an “above the line” adjustment to income that will reduce a donor’s adjusted gross income and thereby reduce taxable income.

Are you an individual or corporation who itemizes? The CARES Act modifies the limitations on charitable contributions during 2020 (Section 2205). Individuals can elect to deduct donations to a public charity of up to 100% of their 2020 adjusted gross income (up from 60% previously). Corporations may deduct up to 25% of taxable income, up from the previous limit of 10%.

Do you take required minimum distributions from your retirement account? The CARES Act puts a temporary waiver of the required minimum distribution (RMD) rules for certain retirement plans and accounts (Section 2203). Required minimum distributions (RMD) that would have had to start in 2020 do not have to start until 2021, including distributions from 457 plans. However, you can still make a qualified charitable distribution of up to $100,000 from your IRA in 2020 to qualified charities such as the Catholic Foundation.

This information is not intended as legal or tax advice. For such advice, please consult your attorney or tax advisor. For more information about making a gift to the Catholic Foundation, contact Lisa Louis at (814) 824-1237 or llouis@cfnwpa.org.

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