CARES Act Tax Incentives for United Way Donors
A couple of months ago, many of us were thinking ahead to fun spring activities and life was “business as usual.” Now, here we are in the middle of a crisis with COVID-19. And YOUR United Way is responding.
Every day we work collaboratively to address needs in our community, which have only increased due to the coronavirus. The United Way of Volusia-Flagler Counties is leading our community with important funding and partnerships to help families hit hardest by the pandemic. It’s humbling to see how many people have already stepped up to support our COVID-19 Emergency Relief Fund.
For those who have already donated to the Emergency Relief Fund, as well as those considering a donation, there are some important new tax incentives as a result of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) of which you should be aware:
- Taxpayers who don’t itemize may now deduct up to $300 per year in charitable contributions. Since this is a universal “above-the-line” deduction, taxpayers don’t have to file Schedule A (itemize) to claim it. Instead, taxpayers list it as an adjustment to income on Schedule 1 of Form 1040 and then deduct it from their gross income (along with all other adjustments to income) on the first page of their Form 1040. Such deductions must be:
- in cash (no property like old clothing)
- given to a 501(c)(3) public charity
(Exclusions: Contributions to non-operating private foundations, support organizations, and donor advised funds.)
- Limitations are lifted on charitable contributions by individuals who itemize from 60% of adjusted gross income to 100% of taxable income. They may also choose to carry forward any unused deductions for up to five years. (Donations to donor-advised-funds would not qualify.)
- If you are over age 70 1/2 you may still benefit greatly from tax-free Qualified Charitable Distributions from your IRA. (Up to a maximum of $100,000.)
- Charitable deductions by a corporation will see an increase from 10% to 25% of taxable income for 2020. (Charitable food contributions will increase from 15% to 25%.) Donations in excess of 25% may be deducted in the following five years.
First and foremost, we care about you and urge you to take care of your immediate needs and ensure you have the means to weather the crisis should it last longer than anticipated. Then, if you are in a position to help those more in need, follow money expert Clark Howard’s advice: “…the best efforts are those that are local—that you know how any…money you donate will be put to work.” United Way of Volusia-Flagler Counties is a good steward of our donors’ gifts and transparent about how all donations help people in need—right here in Volusia and Flagler Counties. We are a local solution to the many needs facing our community during the pandemic and EVERY DAY.
Stay safe, stay well!
Sheila Pillath, MSW
Director of Resource Development
United Way of Volusia-Flagler Counties
David Jones, CPWA
Community Development Manager
As always, we recommend consulting with your financial and tax advisors for your individual situation. Should you wish to speak to our community professionals about your gift, please contact us at firstname.lastname@example.org or email@example.com.
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