To help encourage charitable giving during this difficult time, the U.S. Congress, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, expanded the favorable tax treatment provided to charitable contributions under the federal tax laws. The CARES Act includes two charitable giving incentives that are of note, especially as they relate to FAU Foundation funds. The new provisions are:
New Charitable Deduction for Individuals Who Don’t Currently Itemize: Starting in calendar year 2020, cash contributions of up to $300, made by individuals to public charities, such as the FAU Foundation, may now be deducted from federal taxes even though the taxpayer does not itemize. Currently, only itemizing taxpayers can deduct charitable contributions; therefore, this new legislation would allow all non-itemizing taxpayers to benefit from a modest charitable deduction. This change does not apply to contributions to donor-advised funds (DAFs) and supporting organizations.
AGI Limit on Cash Charitable Contributions Suspended in CY 2020: The 60% of adjusted gross income (AGI) limitation on cash contributions by individuals to public charities, such as the FAU Foundation, has been lifted in calendar year 2020. Therefore, for calendar year 2020, individual taxpayers can deduct cash charitable contributions of up to 100% of their AGI. This change does not apply to contributions to DAFs and supporting organizations. For corporations, the 10 percent limitation is raised to 25 percent of taxable income.
Of course, each individual’s tax situation is different. Specific questions about how these changes may affect you personally should be sought from your accountant or tax advisor.
For more information about how you can make a gift under these new rules, please contact your development officer, the Foundation at (561) 297-2058, or speak with your financial advisor.