CARES Act tax incentives
Augustana students and their families are navigating uncharted waters as they plan for fall enrollment. The college also is dealing with a growing number of challenges due to the COVID-19 pandemic.
Fortunately, Congress recognizes the need faced by many families and nonprofits and the importance of continued charitable giving. Through its actions, corporate and individual donors can maintain or increase their giving in order to support the missions they most hold dear.
Below are key provisions of the new CARES Act that are designed to help you make a gift in support of Augustana’s mission and our students.
All taxpayers may take up to $300 ($600 for a married couple) in annual charitable cash contributions, even if they do not itemize. It is an “above the line” adjustment to income that will reduce a donor’s adjusted gross income, reducing taxable income. A donation to a donor-advised fund does not qualify for this new deduction.
New charitable deduction limits
Individuals and corporations that itemize can deduct much greater amounts of their cash contributions to charities.
Individuals can elect to deduct donations up to 100% of their 2020 adjusted gross income (up from 60%).
Corporations may deduct up to 25% of taxable income (up from 10%).
The higher deduction does not apply to donations to a donor-advised fund.
Required minimum IRA distributions suspended
There will be no required minimum distributions for qualified retirement plans in 2020. However, if you are 70½ or older, you may still direct a major gift from your IRA to charities.
Please contact Sam Schlouch, major gift officer, if you have questions or would like to talk further about these options.
We are sincerely grateful for your generosity.
This information is not intended as legal or tax advice. For such advice, consult an attorney or tax advisor. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results.