Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
(S.748)  Charitable Giving Incentive: Includes an above-the-line deduction (universal or non-itemizer deduction that applies to all taxpayers) for total charitable contributions of up to $300. The incentive applies to contributions made in 2020 and would be claimed on tax forms next year. The bill also lifts the existing cap on annual contributions for those who itemize, raising it from 60 percent of adjusted gross income to 100 percent. For corporations, the bill raises the annual limit from 10 percent to 25 percent.

CHARITABLE CONTRIBUTIONS - IRA

The “Setting Every Community Up for Retirement Enhancement” Act, also known as the SECURE Act, was signed into law on December 20, 2019.  The SECURE Act, which went into effect on January 1, 2020, changes many of the rules governing retirement plans, including several provisions relevant to making qualified charitable distributions (QCD).

Benefits of a Charitable IRA Rollover Gift (QCD)

The SECURE Act increased the age at which individuals must start taking required minimum distributions (RMDs) from 70½ to 72. (Note: Those who turned age 70½ on December 31, 2019 or earlier must continue taking RMDs.) Once a person reaches 72, one of the great benefits of a QCD is that it will count toward your RMD. However, even if you have not reached age 72, there are still good reasons to consider a QCD at 70½. First, a QCD offers all the benefits of an income tax charitable deduction, even if you don’t itemize your deductions. You can’t claim a deduction for your QCD, but your QCD is not included in your income. Your QCD is always a tax-free gift.

Your professional advisor can help guide you through the process.