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The Care’s Act and You

The Care’s Act and You

Categories: Blog, planned giving

As a donor to charitable organizations like Midland Care, the CARES Act impacts your giving. The Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law on March 27, 2020. We encourage you to contact your financial adviser with any questions you might have concerning the CARES Act and your finances.

Above the Line Deduction
Individuals who do not itemize can deduct up to $300 in cash donations to a qualified charity. This is an addition to the standard deduction.

Relaxed Limitations
The CARES Act relaxes the limitations on deductions for individuals. For those who choose to itemize IRS Section 170(b)(1) limits the deductions for cash contributions to 60% of the individual adjusted gross income. Under the CARES Act, the deduction to a qualified charitable organization in 2020 is increased to 100% of the individual adjusted gross income. If the contribution exceeds the limitation, the
individual can still carry forward and utilize the excess amount for the next 5 years.

The CARES Act also relaxes the limitations on deductions for corporations. Under prior law, corporate deductions were limited to 10% of taxable income. The CARES Act increases the limitation to 25% of taxable income in 2020.

Required Minimum Distribution
If you are 70 ½ you can still make a contribution to a qualified charitable organization to meet your required minimum distribution from your IRA. However, the CARES Act is waiving this requirement for donors in 2020.

As you look over your financial plans, we encourage you to talk to your financial advisor about the benefits of a Charitable Lead Annuity Trust and its benefits in your plans. Please contact our Legacy Gift Planner, Monty Nelson at 785-214-0125 or for more information.

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