How Does the CARES Act Affect Giving?

Wednesday, December 16, 2020

Thank you so much for considering a gift to Julie Billiart Schools as part of your overall philanthropic giving. Every gift truly makes a difference to our students, and we would not be able to provide the JB experience without the generosity of so many. We are grateful.

Below you will find information about the changes to the tax laws under the CARES Act. If you have any questions, please feel free to contact Anne Jarrad at 216-691-8916 x 163 or by email at ajarrad@jbschool.org. Thank you for your belief in and support of our mission.

What is the CARES Act?

The Coronavirus Aid, Relief, and Economic Securities (CARES) Act was signed into law in March of 2020. In regard to philanthropy, the CARES Act re-incentivizes charitable giving. It enables a taxpayer who takes a standard deduction to benefit from his or her charitable gifts. A $300 above the line deduction is now available for gifts of cash by someone who does not itemize. Please note that this only qualifies for gifts of cash, not stock, and must be made directly to a qualifying charity, not private foundations or donor-advised funds.

How does this affect you?

• For the tax-year ending December 31, 2020, gifts of cash to charitable organizations (excluding private foundations or donor-advised funds) are deductible up to 100% of the adjusted gross income (AGI).
• Gifts DO NOT have to be directed to Coronavirus relief in order to qualify for the CARES Act. Your gift to JB would qualify!
• The Required Minimum Distribution (RMD) is waived in 2020 for IRA or other qualified retirement plan owners. This permits IRA and other qualified retirement plan owners to retain the funds in their IRAs. Benefactors will still have the option to make IRA charitable rollovers of up to $100,000 in the calendar year from their IRA.
• Gifts must be made in 2020 to qualify.

How can this affect your corporation?

• The CARES Act has a provision that has increased limitations for charitable deductions for corporations from 10 to 25 percent of the corporation’s taxable income for 2020.

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