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The 2020 CARES Act and Charitable Giving

In response to the COVID-19 pandemic, Congress passed the CARES Act in March 2020. The Act provides significant and unique tax benefits for charitable giving in 2020.

  1. All donors can take up to a $300 charitable tax deduction even if you do not itemize deductions.
     
  2. The CARES Act eliminates the limit on the federal charitable income tax deduction for certain kinds of gifts made in 2020. This year only, taxpayers who donate cash to a public charity may take a federal charitable income tax deduction equal to as much as 100% of their adjusted gross income (AGI). In prior years the federal charitable income tax deduction for cash gifts to charity was capped at 60% of AGI. If you have substantial cash assets that you intend to provide to charity, this is the year to donate to Beth Am or another charity of your choice.

    NOTE: There are limitations to the charitable deduction 100% of AGI rule — the increased deduction limit applies only to cash gifts and not to gifts of appreciated securities or other property. It also applies only to gifts to public charities, such as Beth Am, and does not include contributions to Donor Advised Funds or Private Foundations.
     
  3. Charitable gifts from IRAs traditionally have also been subject to the contribution limit, except for gifts up to $100,000 a year made directly from an IRA by individuals over 70 ½. For 2020, individuals over 59 ½ can withdraw unlimited amounts from their IRAs and donate some or all of the distribution as a tax-deductible donation to Beth Am.

    NOTE: Giving to charity through your IRA may be even more beneficial because the SECURE Act (passed in 2019) severely limits one of the benefits of passing an IRA to your children. Rather than allowing the children to extend tax-free growth and taxable distributions over their lifetimes, they now must distribute the IRA in full within ten years of the date of death.
     

We hope you will reflect on these changes as you make decisions regarding your charitable giving. Please consider providing additional gifts or making current payments of outstanding pledges to Beth Am. Thank you.
 
Of course, all tax decisions should be made in consideration of your personal situation and in consultation with your tax advisors. 

For questions about giving to Beth Am, please contact Mandy Eisner, Director of Development, at meisner@betham.org or (650) 493-4661, x211.

Tue, April 20 2021 8 Iyar 5781