The Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act, was passed by Congress on March 27, 2020. Included in the economic stimulus package are changes that may have an impact on philanthropy. Below are a few things included in the Act that you should note.
2020 Charitable Incentives for Individual Donors:
Incorporated in the CARES Act are incentives for charitable donations given by individual donors in 2020. These incentives include increased Charitable Deduction Limits. For those who plan to itemize, the existing cap on annual contributions has increased from 60% to 100% of their adjusted gross income (AGI). Charitable contributions of up to $300 may also be deducted as an above-the-line deduction from all taxpayer’s AGI.
What types of gifts qualify?
Contributions must be in the form of cash and only apply to charitable gifts made in the 2020 calendar year. The incentives are not applicable for contributions made to donor-advised funds or non-operating private foundations.
Required Minimum Distributions (RMD) Have Been Waived for 2020
There will be no RMD in 2020 for IRAs or other qualified retirement plans. Donors who are the age of 70 ½ may still choose to make a qualified charitable distribution (QCD) through their IRA up to $100,000. A QCD would be excluded from taxable income, and would also lower the IRA balance for future RMDs.
Penalty-Free Withdrawal from Retirement Plans
Those younger than 59½ will not be subject to the 10% early-withdrawal penalty for up to $100,000 from retirement plans if they qualify for COVID-related hardship. You have up to three years to pay taxes and replace any withdrawals made.
We encourage you to consult with your professional advisor to ensure you are informed of your options. If you have questions on how the CARES Act may impact your giving to Orlando Health, or if you would like to discuss tax-wise ways of giving, please contact: Matt Lilly, Vice President of Planned Giving at (321) 843-2488 or [email protected] or Tiffany Collier, Director of Planned Giving at (321) 841-7010 or [email protected].