The CARES Act and Tax Strategies for Giving

The CARES Act of 2020 makes some significant changes for charitable giving. 

Tax deductions now available to all tax filers, regardless of whether you itemize deductions.

  • Donors who do not itemize may take a tax deduction for cash gifts of up to $300 per person or couple.  This is a one-year change, but it means that taxpayers who didn't used to be able to take any deduction now can reduce their taxable income by up to $300, and so reduce their tax burden.
  • The charitable organization receives $300 and the donor pays less in taxes, with specific amounts depending on household tax bracket.

Increase the cap on charitable gift tax deductions

  • The cap on deductions for a charitable gift increased from 60% to 100% of adjusted gross income.
  • This applies only to cash gifts.
  • Gift amounts beyond 100% of a donor's adjusted gross income can be carried over for up to five additional years.
  • This provides an opportunity for additional tax savings for donors making large gifts. For example, if a donor makes a gift of $100,000 in one year and has an adjusted gross income of $100,000 for that year, there would not be any income tax liability. If the gift were $130,000, the donor could claim a deduction of $100,000 in the first year and claim a deduction for $30,000 in the following year.

Increase the cap on charitable gift tax deductions for corporations

  • The cap on deductions for a charitable gift from a corporation increased from 10% to 25% of taxable income.
  • This applies only to cash gifts.
  • This provides an opportunity for additional tax savings for a corporation similar to the example above for the individual donor.

Required Minimum Distribution from IRAs suspended for 2020

  • Persons 72 years old and older with an IRA are not required to take a minimum distribution in 2020.
  • This is significant because the amount of the RMD is based on the value of a person's portfolio of stocks on December 31, 2019. With the crash of the market since that date, the required distribution would be significantly more than if based on current value. Not having to take a distribution in 2020 allows a retiree to leave their money in the market and hopefully see the value of their portfolio restored.


CASE, the Council for Advancement and Support of Education, has released a statement on the CARES Act and its potential impact on educational institutions and giving.  
For more information visit the CASE website: >> 

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With so much uncertainty about the potential impact of current economic conditions, sometimes the simplest plan makes the most sense: give now and know that your gift wil make a difference to our students and faculty. You can support the Widener Fund, our Student Emergency Fund, or any department, school, program, or team that's important to you.

 

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Qualified Retirement Plans >>
Alumni who have reached 70½ years of age (or 72 after December 31st, 2019) can save on taxes by directing a charitable rollover from their IRA to Widener University.  Because these gifts are rollovers, instead of distributions, this strategy provides a powerful way to make a gift from distributions and bypass taxable income.  Contact your plan administrator to help make this gift.  

 

Please note that the CARES Act of 2020 eliminates the requirement to take a minimum distribution in 2020.

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Widener is a full-service university with thousands of students, so donors have the opportunity to suppport financial aid, academic programs, athletics, international experiences, and more.  Take a look at a partial list of funds that donors have supported just in the last two years to find an area that's important to you.

 

If you have further questions, please reach out to any member of the Development and Alumni Engagement Staff >>.  

Widener recommends that before making any significant gift you speak with your preferred tax professional and your financial advisor.  Widener University cannot offer tax advice.