CARES Act for Nonprofits

Date: 
Tuesday, August 11, 2020

We want to share some information that our members might not be aware of, that could not only help CCA, but their want to support nonprofits affected by Covid 19.    

Congress passed, and the President signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion economic stimulus package legislated to provide immediate relief for nonprofits back in March.  There are opportunities for CCA members to maximize their giving to the Coastal Conservation Association here in Oregon.  There are also a tax planning opportunity related to retirement plan / IRA required minimum distributions that may be helpful to some of our members.  If you’re like myself, a lot of this may be Greek, so rely on your tax advisor who should be able to help you navigate this complicated act of congress to assist non-profits like CCA across the country.  Here are some details we have found:

  • New Deduction Available: Up to $300 per taxpayer ($600 for a married couple) in annual charitable contributions. This is available only to people who take the standard deduction (for taxpayers who do not itemize their deductions). It is an “above the line” adjustment to income that will reduce a donor’s adjusted gross income (AGI), and thereby reduce taxable income. A donation to a donor advised fund (DAF) does not qualify for this new deduction.
  • New Charitable Deduction Limits: As part of the bill, individuals and corporations that itemize can deduct much greater amounts of their contributions. Individuals can elect to deduct donations up to 100% of their 2020 AGI (up from 60% previously).  Corporations may deduct up to 25% of taxable income, up from the previous limit of 10%. The new deduction is for gifts that go to a public charity, such as the Coastal Conservation Association. The old deduction rules apply to gifts to private foundations. The higher deduction does not apply to donations directly to a DAF.
  • Required minimum distributions waived in 2020 for most donors: RMD for individuals over age 70 ½ are suspended until 2021. This includes distributions from defined benefit pension plans and 457 plans. The RMD is an attractive way for donors to make a significant charitable gift directly from their IRA to a charity through a qualified charitable contribution (QCD) while avoiding taxable income. The suspension of the RMD may dampen somewhat the incentive for a donor who makes a gift from their IRA to count toward that minimum. However, the tax benefit of the QCD remains. Donors directing a QCD to charity this year (up to $100,000 per individual) will still reduce their taxable IRA balance. This allows all taxpayers, itemizers and non-itemizers alike, to direct gifts from their IRA to charities in a tax efficient manner

The inclusion of an expanded charitable giving incentive is a critical acknowledgement by Congress that the work of nonprofits are essential services.  Indeed, our fisheries and management of, need the assistance the Coastal Conservation Association more than ever.  It is the first time Congress has passed this type of giving incentive in response to disaster or national emergency.

Obliviously, we need your help to continue the fight to protect our precious natural resources and the sport of fishing in Oregon.  You can do a tax-deductible contribution to CCA HERE or for more information, contact the CCA office or Christopher Cone at chris.cone@ccaoregon.org.  

Keep in mind!  This information is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results.