The Coronavirus Aid, Relief, and Economic Security (CARES) Act contains several provisions that may benefit you through enhanced charitable giving incentives. This new legislation, signed into law at the end of March as a Covid-19 stimulus package, intends to provide immediate economic relief to nonprofits. Please keep the following in mind when you consider making a gift to the Anchorage Park Foundation:
- You can now deduct your gift to the Anchorage Park Foundation, even if you take the standard deduction. The CARES Act allows for up to $300 per taxpayer ($600 for a married couple) in an above-the-line deduction for charitable gifts made in 2020 and claimed on taxes in 2021. This means that you can lower your income tax bill by giving to APF today, even if you take the standard deduction on your taxes.
- If you itemize deductions, there are new charitable deduction limits. The CARES Act increases the existing cap on charitable cash contributions for those who itemize, raising it from 60% of adjusted gross income to 100% in 2020.
- Corporations also benefit from higher charitable deduction limits. The CARES Act increases the cap on how much corporations may deduct for charitable gifts from 10% of taxable income to 25%.
- Were you planning to take a required minimum distribution (RMD) from your retirement account in 2020? The CARES Act waives all RMDs for individuals over the age of 70 1⁄2 who own specified retirement accounts in 2020. However, for account owners who began taking their RMDs prior to 2020, you can still choose to send a qualified charitable distribution to APF and thereby decrease your tax burden. For more information, please talk with your retirement account administrator or accountant.
You have our deepest gratitude for your continuing support of our parks, trails and green spaces. Parks have always been essential public spaces for us, but it has become even more clear over the last few weeks how critical they are to the mental and physical health of our city.
The above information provides an overview of key parts that may change your charitable donations this year, but is not intended as legal or tax advice.