The inclusion of an expanded charitable giving incentives in the COVID-19 CARE Act will impact your giving to Family Promise.  Here is how it works:

New Deduction Available: The bill makes a new deduction available for up to $300 per taxpayer ($600 for a married couple) in annual charitable contributions. This is particularly beneficial to people who take the standard deduction when filing their taxes (in other words for taxpayers who do not itemize their deductions). It is calculated by subtracting the amount of the donation from your gross income. It is an “above the line” adjustment to income that will reduce your AGI, and thereby reduce taxable income.

To qualify, you just need to give to Family Promise.  If you have already made a donation since Jan. 1, that contribution counts toward the $300 cap. A donation to a donor-advised fund (DAF) does not qualify for this new deduction.

New Charitable Deduction Limits: Also part of the bill, individuals and corporations that itemize can deduct much greater amounts of their contributions.

Individuals can elect to deduct cash contributions, up to 100% of their 2020 adjusted gross income, on itemized 2020 tax returns. This is up from the previous limit of 60%.  Corporations may deduct up to 25% of taxable income, up from the previous limit of 10%.

The new deduction is only for cash gifts to the nonprofit, not a private foundation.  .  If you give cash to, say, your private foundation, the old deduction rules apply. These new limits do not apply to gifts of appreciated stock.

Required minimum distributions waived in 2020 for most donors: Required Minimum Distribution (RMD)f or individuals over age 70 ½ are suspended until 2021. The RMD is a way for donors to make a significant charitable gift directly from their IRA to a charity while avoiding taxable income.

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