The CARES Act and Giving With Your IRA

November 14, 2020Giving Strategies

As you plan your year-end giving, keep in mind the enhanced tax benefits passed in the CARES Act:

  1. Non-itemizers can take an “above the line” deduction of up to $300 for charitable gifts to qualifying nonprofits and charitable funds* on their 2020 tax return.
  2. Individuals can deduct up to 100% of their 2020 adjusted gross income for cash gifts made to qualifying nonprofits and charitable funds.*
  3. Corporations may now deduct up to 25% of 2020 taxable income for cash gifts made to qualifying nonprofits and charitable funds.*

The CARES Act also waives all required minimum distributions for individuals who own specified retirement accounts in 2020. IRA account owners (regardless of whether they itemize) who are age 70 ½ or older can still choose to send a qualified charitable distribution, up to $100,000 per individual, to a qualified charitable organization without recognizing income on that distribution  and potentially decreasing their tax burden.

For donors wishing to keep their charitable dollars local, gifts to the Coronavirus Response Fund qualify for deductions. Donors can also support the fund with a qualified charitable distribution from their IRA if they are age 70 ½ or older.

Give us a call to learn more about donating with your IRA at 859.225.3343. You can use your IRA to give to the Coronavirus Response Fund, or one of our county-specific COVID-19 relief funds in Franklin, Harrison, Madison, Rowan or Woodford counties.

*Charitable gifts to donor advised and corporate advised funds do not qualify for the above the line deduction or increase in AGI limitations. However, we are happy to discuss charitable gifts to any of the many qualifying funds administered by BGCF. This is not tax or legal advice. Please consult your tax advisor to determine the best charitable giving strategy for your personal situation.