In March 2020, Congress passed the CARES Act to help bolster the economy during the coronavirus pandemic. Officially named the Coronavirus Aid, Relief, and Economic Security Act, the CARES Act provided a vast array of financial relief for individuals, businesses, and organizations impacted by Covid-19 and the resulting economic downturn.
The CARES Act provided significant changes to charitable giving that are designed to encourage donations to non-profit organizations. The CARES Act is several hundred pages long and contains numerous items that are financially beneficial, so we encourage you to consult with your financial advisors if you have questions. Additionally, while some of the provisions are specifically targeted at charitable giving, others expand on legacy gift planning opportunities. Please contact us if we can assist you with legacy giving.
To help you better understand a few of the tax advantages in the CARES Act, we wanted to highlight three of the most significant changes for charitable giving.
- 1. An additional deduction for taxpayers who do NOT itemize. The CARES Act allows for people who do not itemize their deductions to claim an additional deduction of up to $300 for cash donations made in 2020. This deduction is on top of the standard deduction available for non- itemizers. This means that you will be able to give more to your favorite charities in 2020, while also getting a portion of it back in the form of tax savings.
- A modification on the charitable deduction limits modified for individual who DO itemize. If you do itemize, you will see a significant benefit to donating in 2020. In 2020, large cash gifts will be deductible to the extent of 100% of your adjusted gross income. This is an increase of 40% from previous years. If you have made a pledge to our 2,000 Acre Campaign, for example, it may be very beneficial to pay the balance of your pledge in 2020, rather than finishing in 2021.
- Charitable deduction limits increased for corporations. In the past, the contribution limit for corporations has been 10 percent of taxable income. Under the CARES Act, that limit has been raised to 25 percent of taxable income for cash donations.
The purpose of these provisions is to encourage individuals and corporations to support non-profit organizations as they work to meet the needs of the community during the pandemic. Avalonia has seen
a dramatic increase in visitors since people have flocked to our preserves beginning in March, seeking relief from the lockdown and a chance to be outdoors. This has not only resulted in an increased need for stewardship, it has also illustrated the importance of land preservation.
To make a donation to the Avalonia Land Conservancy, please visit avalonia.org/donate today. Thank you!