You’ve likely heard about the CARES Act — Coronavirus Aid, Relief, and Economic Security Act — passed into law in March 2020. It’s the largest economic relief bill in U.S. history and includes a variety of provisions to help individuals, families, and small businesses obtain economic relief. A couple of those provisions impact charitable giving. Just how depends on whether you itemize your deductions or not.
If you take the standard deduction when you file your federal taxes, the CARES Act gives you a $300 above-the-line deduction for cash donations. What’s that mean? Your donation of up to $300 will be deducted from your adjusted gross income (AGI). This happens before you take the standard deduction. But, because this deduction is limited to cash contributions, gifts to a donor advised fund and complex gifts of stock or other assets do not qualify for this deduction.
For folks who itemize their deductions, you’re normally limited to deducting 60% of your AGI. The CARES Act waives that limit for cash donations. While there’s still a deduction limit of 100% of your AGI for the 2020 tax year, any cash donations above and beyond that may be carried over as deductions for up to five years. Because this exception is only for cash donations, there remain certain limits on deductions for other gifts, like stock or personal property. And, there are still deduction limits for contributions to a donor advised fund.
If you likely won’t itemize your tax deductions for 2020, consider a cash gift to the Minnesota Catholic Relief Fund (MCRF). The MCRF is an emergency relief fund designed to contribute to operational stability for Catholic parishes and schools during the COVID‑19 pandemic. And this week, all gifts to the MCRF DOUBLE.
Thanks to the generosity of an anonymous donor, all gifts to the MCRF from SUN. APR. 19 – SUN. APR. 26 double! In short, if you plan to take the standard deduction in 2020, a cash gift up to $300 to the MCRF can be deducted from your federal taxes. But, any gift — cash, stock, or donor advised fund grant — of any amount to the MCRF will be matched dollar for dollar this week.
Have questions? Contact VP of Development Christopher D. Nelson, J.D., at 651-389-0874.