As COVID-19 continues to spread, the future has never felt so unpredictable. As Family & Children’s Services continues to do everything possible to sustain daily operations and adapt to our changing reality, COVID-19 continues to intensify the need for mental health care services. Because of our incredible donors during COVID-19, our clients are able to continue to get the help and services they need.
And here is some good news. Many donors still do not know is that on March 27, the President signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act to help combat the far-reaching impacts of COVID-19. The bill provides increased tax incentives for charitable giving for both individuals and corporations, signifying an intent to stimulate philanthropy throughout America.
The CARES Act allows individual tax filers, even if they take the standard deduction, to deduct charitable giving donations up to $300 for the 2020 federal tax returns. Those filing jointing will get to claim deductions up to $600. The change is in effect for individual charitable giving through December 31, 2020.
This is a great time to support F&CS with a tax-deductible donation. We are grateful for you for helping provide those in our community with continued support.
Your donation helps:
- Provide vital services to our more than 120,000 clients a year.
- People through loss, challenging life transitions and times of crisis.
- Strengthens relationships and families.
- Preserve and reunify families.
- Enhance parenting skills.
- Restore children’s well-being.
- Teach divorced parents and their children learn to cope.
- Heal children from the traumatic effects of abuse.
- People recover from mental illness and addiction.
- Stabilize those suffering from a psychiatric crisis.
- Prevent suicide.
- Reduce homelessness.
- Provide treatment alternatives to incarceration for non-violent, addicted women.
In other words, because of your support, we help clients rebound from adversity and live life with a sense of mastery and hope.
Two New Tax Benefits to Donors
Universal Deduction for Donations Up to $300
For the over 9 out of 10 people who no longer itemize their charitable giving, the CARES Act will allow these individual taxpayers to deduct donations to charity of up to $300 on their 2020 federal tax return, even though they take the standard deduction. Married-filing-jointly taxpayers will get an above-the-line deduction of up to $600.
Raising the Charitable Giving Deduction Cap
For those donors who are still able to itemize their deductions, and therefore directly write off gifts to charity, the current deduction cap is 60% of adjusted gross income*. Corporations are able to deduct charitable donations up to 10% of taxable income.
The CARES Act lifts these caps to 100% for individuals and joint filers, while corporations will see their cap lifted to 25% for 2020. These are truly substantial changes to the tax treatment of donations. For individuals, it could theoretically mean zero taxable income if someone gives big.
For example, if John Taxpayer has an adjusted gross income (AGI) of $175,000, he would normally be able deduct up to $105,000 for gifts to charity. With the temporary changes in the CARES Act, John could now deduct up to his full AGI of $175,000 if he gives that much to charity in 2020. The math works the same way for corporations.