New Coronavirus Stimulus Package May Affect Your Giving: The CARES Act
We recognize with the constantly changing COVID-19 situation around the world, this is an unprecedented time for everyone — a time, for many, that is filled with uncertainty. Our prayers go out to each of you. The Friars are grateful for your generous support of our ministries over the years. As we adapt to our new reality, we would like to bring to your attention new tax rules for charitable giving. In times like these, we believe it is important to provide you with helpful information about how you can help ensure the friars’ ministry will continue far into the future.
The Coronavirus Aid, Relief and Economic Security Act (CARES Act) was enacted on March 27, 2020. The Cares Act contains incentives that encourage continued charitable contributions in 2020. Below, we offer a few key points to consider as you plan your continued support and make plans to reach out to your financial advisor.
Like you, the Province of Our Lady of Consolation is adapting and changing in response to the COVID-19 pandemic and accompanying economic uncertainty. With your help the friars can continue to improve lives in the face of the coronavirus crisis and beyond.
Please consult your financial advisor before making any tax, legal, financial planning or investment decisions.
Thank you for all you do to support the ministries of the friars in this ever-changing world.
Peace be with you,
Shaunna Graf, Director of Major Gifts and Planned Giving
Key Points of The CARES Act for Giving Charitable Gifts
- Deduct up to $300 ($600 per couple) from your Adjusted Gross Income (AGI), whether or not you itemize deductions.
Example: When they filed their 2019 tax returns, Robert and Mary were not able to take a tax deduction for the $600 donation they made to the Student Friars Fund in 2019. When Robert and Mary make their $600 donation to the Student Friars Fund in 2020, even though they will take the standard deduction rather than itemizing, they can now receive an above the line “ income deduction” which reduces their taxable income by $600.
- Deduct up to 100% of your AGI for the year 2020 when you make a cash gift
Example: Karen wants to donate to the Alpha and Omega Fund for Senior Friars and Student Friars. Karen has $80,000 of AGI for 2020 and would like to give the friars $10,000. For this year only, the CARES Act allows a 100% charitable contribution deduction for Karen’s $10,000. Karen can also increase her AGI by converting her traditional IRA to a Roth IRA. This conversion allows Karen to accomplish two goals at the same time: get an even larger charitable contribution deduction in 2020 and pay no federal income tax on the Roth IRA conversion.
- Corporations’ 10% Giving Limit Increased to 25% for 2020
Example: Delicious Chicken restaurant makes donations of their delicious chicken to the Franciscan Kitchen in Louisville, Kentucky providing for the nourishment of the 400 daily hungry guests who are in need. In 2020, Delicious Chicken will be able to donate and take a deduction for 15% more of their Delicious Chicken in 2020.
- Required Minimum Distributions from your IRA will be waived for 2020
In 2020, you can still donate up to $100,000 from your IRA to the friars’ ministry without reporting the distribution as income.