The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a $2.2 trillion stimulus plan that contains funding opportunities for charities and enhanced charitable giving incentives. The information below is an overview of the key provisions of the plan to help get started but is not intended to provide legal or financial advice.
- Retirement Plan Minimum Distribution Rules Suspended – The CARES Act has suspended the minimum distribution requirements for 2020. This includes distributions from most qualified retirement plans and IRAs, included inherited IRAs. You still can take distributions from your IRA, and the rules surrounding using IRA distributions to fund charitable giving have not changed.
- Temporary Universal Charitable Deduction – The Act creates a new universal charitable contribution. Cash donations of up to $300 are eligible for an above-the-line tax deduction in 2020. The deduction is ONLY for gifts of cash made in calendar year 2020 and does not cover other types of gifts or contributions made to donor-advised funds or private foundations. This deduction is not available to taxpayers who itemize.
- Suspends the 60 percent adjusted gross income limitation for individuals’ donations for 2020 – For those who do itemize their deductions, the Act allows for cash contributions to qualified charities, such as Reitz Memorial High School to be deducted up to 100% of your adjusted gross income for the 2020 calendar year. In a typical year, individuals can only take a charitable deduction of up to 60% of their adjusted gross income, no matter how much they give.
We are deeply grateful for your continued support and generosity during this difficult time. If you have questions, please reach out to the Advancement Office at 812-303-0006
