How does the legislation impact your giving for 2020?
In response to the financial impact COVID-19 has had on the U.S. economy, Congress passed legislation on March 27, 2020 to help alleviate some burdens for families and businesses. Aside from direct payments to families, protection programs, and various forms of stimulus, Congress included beneficial provisions to help families save on taxes when they support their church, favorite ministry and other eligible non-profits.
Under normal tax code, if a taxpayer itemizes, they can donate CASH up to 60% of their Adjusted Gross Income (AGI) in a calendar year. However, the CARES Act allows taxpayers, for 2020 only, to donate CASH up to 100% of their AGI. This means a giver could potentially avoid paying any Federal Income tax in 2020 based on their giving and maximized deductions.
Additionally, corporations also saw an increase in giving potential from 10% of income to 25% of income, for 2020 only. These increased limits may be beneficial for corporations who had steady income through the year or for those companies who want to take advantage of deducting against their current income to make a kingdom impact through the ministries they support.
Lastly, for individual taxpayers, the CARES Act provided an incentive for givers who don’t itemize their tax deductions. For those who fall below the standard deduction but still wish to receive tax benefits from their giving, can benefit from an above-the-line deduction of $300 per household for 2020 only.
With the end of the year fast-approaching, please call our experienced Planned Giving team to discuss how the CARES Act may help you plan your giving before this special provision expires on December 31, 2020.
Contact us at 800-782-8227 -or- [email protected].
Focus on the Family does not provide legal, tax, financial or other professional advice. You should consult professional advisors concerning the legal, tax, or financial consequences of your charitable activities.