Charitable Deductions

CARES Act Information

Did you know that some of your contribution to the Y might be tax deductible, even if you use the standard deduction?

The CARES Act of 2020, passed into law in March in response to the COVID-19 pandemic, allows taxpayers to take a deduction for charitable contributions up to $300 ($600 for a married couple). Prior to the passage of this law, taxpayers who take the standard deduction were not able to receive a tax deduction for any charitable contribution they made. This new provision of the CARES Act makes it possible for any contributor to take a deduction on their taxes for their generosity. Any donations made to a qualified charity since January 1, 2020 counts toward the $300 deduction limit.

A GUIDE TO RECENT CHANGES

New Universal Deduction for All Taxpayers Up to $300
➢ Individuals may now elect to take an above-the-line charitable deduction of up to $300 for cash gifts made to public charities in 2020. This applies to both itemizers and non-itemizers.

Required Minimum Distributions Suspended in 2020
➢ Required minimum distributions from Individual Retirement Accounts (IRAs) are suspended for 2020; however, benefactors 70½ or older may still make qualified charitable distributions (QCDs).

Cash Contribution Limits Raised for 2020
➢ The adjusted gross income (AGI) deductibility limit for gifts of cash by individuals is now 100%, up from 60%.
➢ The AGI deductibility limit for gifts of cash by C-corporations is now 25%, up from 10%.

Determining a giving strategy is largely dependent on individual factors, such as income bracket, deductions, and personal goals. The Marshalltown YMCA-YWCA does not provide legal or tax advice. Donors should consult with their legal or tax advisors before making charitable gift to the Y or any other worthy charity.