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CARES Act 2020

The U.S. Congress passed the Coronavirus, Aid, Relief, and Economic Security (CARES) Act, and there have been questions from many of you about how this affects WMU and other causes. Here are some items to consider in terms of your philanthropic support.

  • If you do not itemize deductions, you may still take an "above-the-line" deduction for up to $300 in cash gifts you make to WMU this year. The break is available to people who claim the standard deduction, which is $12,400 for singles or $24,800 for married-filing jointly in 2020. This provision was inserted specifically to encourage charitable giving this year.

  • If you do itemize, you may deduct up to the entire amount of your adjusted gross income (AGI) for cash gifts you make in 2020, without reference to the 60% limitation that would otherwise apply. Gifts to donor-advised funds do not qualify. In 2020, a donor who deducts 30% of AGI in long-term appreciated property gifts and elects the 100% of AGI limit for qualified cash contributions will be able to also deduct up to 70% of AGI for qualified cash gifts, a total of up to 100% of AGI. If this donor uses all available deductions for qualified cash gifts, that donor will pay no federal income tax in 2020.

    The limitation on deductions for cash contributions by corporations has also been temporarily increased, from 10% of taxable income to 25%.

  • The CARES Act impacts owners of Individual Retirement Accounts (IRAs) by providing a temporary waiver of Required Minimum Distributions for 2020, allowing IRA owners of age 72 and older to keep funds in their IRAs and other qualified retirement plans. The decreased value of their portfolios may motivate some people to keep funds in their accounts temporarily, waiting to see what happens in the investment markets. You may still make direct distributions to WMU from your IRA, just as before if it makes financial sense for you to do so.

  • The minimum age for making a qualified charitable distribution (QCD) from your IRA is still 70 ½ and the amount limit is still $100,000. The QCD is still available for 2020 even though RMDs have been suspended. Or, you can take distributions from your IRA and make deductible gifts in 2020, with no AGI limitation.

  • The new law, coupled with current financial uncertainty, has created an appealing climate for those concerned about their income from investments. Please contact us if you would like to learn more about how you can transfer assets (cash, securities, real estate, etc.) into a secure income stream for yourself or others.

  • Recent steps taken by the Federal Reserve Bank on federal lending rates have made certain charitable gift strategies more advantageous at this time. Please contact us if you would like to learn more about how you can reduce the size of your taxable estate while planning for a transfer to heirs, all while making a sizeable gift to Western.

    If you are thinking of updating your estate plan, please consider including a gift to WMU. You can leave a legacy at your alma mater that will help generations of students.

Still want to learn more about why alumni give back? Check out the Top Ten reasons to make a gift here, and Giving Impact stories here