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CARES Act Legislation May Offer Benefits to LU Donors in 2020

On March 27, 2020, in response to the COVID-19 pandemic, President Donald J. Trump signed into law the Coronavirus Aid Relief and Economic Security (CARES) Act. Several provisions of this law provide incentives for donors to charitable institutions.* 

 

Here are some of those provisions that may be of benefit to donors to Liberty University in 2020.

 

  • $300 Tax deduction available fo non-itemizers. Even if you take the standard deduction on your 2020 federal income tax return, the CARES Act allows individual taxpayers to claim a charitable deduction for up to $300 in cash contributions (and up to $600 for a married couple filing jointly) to a qualified charity, such as Liberty University. This temporary allowable deduction does not apply to gifts made through a Donor Advised Fund, gifts of stock, or gifts other than cash.

 

  • No Cap on charitable giving deductions for those who itemize. Taxpayers who choose to itemize on the 2020 federal income tax return may deduct cash gifts to public charities up to 100 percent of adjusted gross income. This does not apply to donations of non-cash assets. Gifts made to Donor Advised Funds do not qualify.
  • Corporate donations. Under the CARES Act, charitable deductions by C-corporations for cash contributions made in 2020 have been raised from 10 percent to 25 percent of taxable income. Other allowances and restrictions apply.

 

  • No effect on Charitable IRA Rollovers. While the CARES Act temporarily waives the required minimum distribution (RMD)  for qualified retirement plans for anyone 70 ½ and older, tax-free gifts (qualified charitable distributions, also known as charitable IRA rollovers) are still allowed up to $100,000 annually from an eligible IRA.

*Consult with your financial advisor or tax attorney for advice on these and other potential tax benefits. Liberty University does not provide tax, legal or accounting advice.