How the New CARES Act May Affect Your Charitable Giving

During these anxious times, IJ’s work guarding against government overreach is more important than ever—and so is your support. The legislative response to the COVID-19 pandemic has impacted every aspect of American life, and charitable giving to organizations like IJ is no exception.

On March 27, 2020, President Trump signed a sprawling $2 trillion emergency spending bill: the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act. Buried in its hundreds of pages, the Act has provisions that could benefit you financially when you give to a nonprofit like IJ. Here are a few specific items worth considering when you talk with your financial advisor.

100% of Adjusted Gross Income Available in 2020 for Cash Gift Deductions

For the 2020 tax year only, donors may deduct up to 100% of their adjusted gross incomes for cash gifts made to public charities. In the past, the highest share of income that a donor could deduct was 60%, so this is a dramatic change. We know that many readers would rather see their money go to IJ than to the federal government, and this is a new way to make that happen.

New $300 Charitable Deduction for Non-Itemizers

The CARES Act amended the Internal Revenue Code to allow taxpayers who do not itemize deductions to nevertheless deduct up to $300 ($600 for a married couple) for cash gifts to charity on top of the standard deduction. This above-the-line deduction, though modest, is welcome.

Required Minimum Retirement Distributions Waived in 2020

This tax year, the IRS will not require mandatory distributions from retirement accounts like IRAs. This is a helpful change for those who want those accounts to have time to recover. If you are already thinking about donating retirement assets to charity, however, the minimum age for making a tax-free transfer from an IRA to an organization like IJ remains 70½, and the annual limit remains $100,000. With cash gifts deductible in 2020 to the full extent of adjusted gross income, some donors may want to consider withdrawing from a retirement account, contributing a larger amount to charity, and offsetting the withdrawal with a deduction.

For more information on gift planning opportunities, please feel free to contact us directly at [email protected]. We greatly appreciate your support and thank you for your commitment to IJ. With your help, IJ will vigilantly fight for liberty during this pandemic and beyond.

Rob Peccola is an IJ attorney and special counsel to IJ’s Four Pillars Society.