In uncertain times, fundraising for important causes because both more difficult and more essential. When you feel helpless in the face of a global crisis, giving to nonprofits doing work that is close to your heart is a great way to make a difference. We hope you will help us see the children and families of NSW through this challenging time.
To encourage charitable giving, the CARES Act has authorized additional tax benefit for this year:
New Charitable Deduction Limits:
As part of the bill, individuals and corporations that itemize can deduct much greater amounts of their contributions. Individuals can elect to deduct donations up to 100% of their 2020 AGI (up from 60% previously). Corporations may deduct up to 25% of taxable income, up from the previous limit of 10%. The new deduction is for gifts that go to a public charity like SEALKIDS. The old deduction rules still apply to gifts to private foundations. The higher deduction also does not apply to donations directly into a Donor Advised Fund.
New Deduction Available:
Up to $300 per taxpayer ($600 for a married couple) in annual charitable contributions. This is available only to people who take the standard deduction (for taxpayers who do not itemize their deductions). It is an “above the line” adjustment to income that will reduce a donor’s adjusted gross income (AGI), and thereby reduce taxable income. A donation to a donor advised fund (DAF) does not qualify for this new deduction.
Required Minimum Distributions Waived in 2020 for Most Donors:
Required minimum distributions (RMD) that would have had to start in 2020 do not have to start until 2021, including distributions from defined benefit pension plans and 457 plans. This means a qualified charitable donation this year will still allow itemizers and non-itemizers alike to direct up to $100,000 from their IRA to charities in a tax efficient manner.
