In the midst of 2020 uncertainties, we have been encouraged by positive stewardship and giving responses in AWF Conference churches. Many churches are not only surviving but thriving during the challenges that this year has brought. God is moving and inspiring his people to give and continue ministry in many different and unique ways.
As we enter into fall, year-end giving campaigns begin, and many face concerns regarding the impact that Coronavirus and the CARES Act will have on this year’s generosity. While it is important to continue promoting stewardship and generosity as a means of worship and to know what tax benefits are available for 2020, it is also good to be sensitive to those who have struggled this year.
As well as addressing needs that arose from COVID-19, the Coronavirus Aid, Relief and Economic Security (CARES) Act (passed by Congress in late March) includes tax incentives to encourage charitable giving in 2020. There are several specific charitable provisions included in the CARES Act that are only available in 2020:
- You may deduct gifts of cash to most public charities to offset as much as 100% (normally 60%) of your income. This excludes contributions to donor advised funds or supporting organizations.
- If you take the standard deduction instead of itemizing, taxable income may be reduced by up to $300 for charitable gifts in 2020 (when using an “above-the-line” adjustment to reduce taxable income).
- Corporate giving limits have been increased from 10% to 25% by the CARES Act for cash contributions made to public charities.
- For 2020, Congress has temporarily waived Required Minimum Distribution (RMD) for retirement accounts. Qualified Charitable Distribution (QCD) still remains a great way to make a year-end gift for those 70 1/2 and older for gifts up to $100,000.
- For those over the age of 59 1/2 and not subject to the 10% penalty tax for early retirement plan withdrawals, the 100% deduction limit on gifts made from retirement plan assets is an attractive choice for charitable giving.
If you, or your church, are interested in learning more about these gifts, contact us at (334) 793-6820 or email [email protected].
*This information is not intended as legal, tax, or investment guidance. Please consult your attorney, tax professional, or investment professional for advice.