Donors, Charities Win with the CARES Act

The Coronavirus, or COVID-19 has certainly impacted our economy and our day-to-day lives including the public practice of our Faith throughout the Diocese of Raleigh and the world.  While we all try to get accustomed to a ‘new normal’ existence, we can benefit from tax legislation that will be advantageous to donors and will significantly help charitable ministries at the same time.

The CARES Act was signed into law on March 27, 2020.   Here is a summary of this historical legislation that will assist all charitable donors and their favorite non-profit organizations.

SUMMARY

1. The CARES Act suspends existing limitations on deductions of cash donations to public charities.
2. Donations must be made to a public charity such as The Foundation of the Diocese of Raleigh.
3. All gifts must be in cash, not asset-based or in-kind gifts
4. Donors who itemize their charitable deductions can deduct 100% of their cash gifts in the 2020 tax year. For example, if a person donates $1,000 to a charitable organization, in 2020 they can deduct the full amount of $1,000.
5. Donors who do not itemize their deductions also benefit.  A deduction is being given of up to $300. They can calculate this new deduction by subtracting the amount from their gross income.  If a donor’s assets are large enough to exceed their income and they’re giving more than their income, they will not lose their deduction for the excess amount and can use it next year.
6. Required Minimum Distributions from IRA or 401K plans are suspended for 2020. This helps Donors not have to lock in losses in their IRA accts by having to make a distribution. So, the impact will be on gifts made through retirement accounts in 2020.
7. Charitable Gift Annuities funded with cash are particularly advantageous in 2020 with the deduction of 100% of cash contributions.

For more information or to discuss gifts to The Foundation that can be restricted to the donor’s favorite Diocese of Raleigh ministry, contact Joe Langenderfer at the Foundation Office at 919/568-1065 or at Joe@FoundationDOR.org.