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2020 Charitable Giving and the CARES Act

Posted on January 7, 2021

Year-end charitable giving has the potential to be a life-saving donation to nonprofit organizations as individuals, businesses and nonprofit organizations are wrapping up the most challenging year in our recent history (which seems like an understatement). For those individuals who are charitably-inclined, who want to give back, who wish to do their part to ensure no one is left behind, this may be an opportune time to make a charitable contribution.

Earlier this year, the President of the United States signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion economic stimulus package legislated to further incentivize charitable giving by providing increased tax incentives for charitable giving for both individuals and corporations.

Do you Itemize Deductions?

Individuals who itemize deductions can now benefit from the increase in the limit historically placed on adjusted gross income (AGI) for cash contributions. For cash contributions made in 2020, you can elect to deduct up to 100 percent of your AGI (increased from 60 percent).

Not Itemizing?

The CARES Act provides for a new charitable deduction for those individuals who do not itemize. You may now claim an “above-the-line” deduction for charitable gifts made in cash up to $300 as long as you are not itemizing your deductions on your 2020 income tax return.

Interested in Corporate Giving?

The AGI limit for cash contributions was also increased for corporate donors. Corporations can now deduct up to 25 percent of their taxable income (increased from 10 percent).

AGI Limitations

It is important to note that the above tax incentives only apply to cash contributions to public charities and do not apply to contributions to supporting organizations or public charities that sponsor donor-advised funds. That being said, because no changes were made to existing deductions for contributions into a donor-advised fund, you are still able to deduct cash contributions to a donor-advised fund up to 60 percent of AGI and appreciated property contributions up to 30 percent of AGI.

Carryover of Excess Contributions

If your 2020 donations exceed your AGI deduction limit, you may carry forward excess deductions for up to five tax years.

Selected Distributions from Eligible Retirement Plans and IRAs

The Cares Act eliminated the $100,000 annual limitation historically imposed on 2020 distributions from eligible retirement plans and IRA accounts. Therefore, if you are charitably inclined, you may be able to take a significant distribution from your eligible retirement plan or IRA during 2020, donate it to a charity, and claim a deduction for the full amount of the distribution.

  • If you are under age 591/2, you should be able to withdraw up to $100,000 in aggregate from specified qualified retirement plans and IRAs during 2020 without a 10 percent early withdrawal penalty, provided you meet the eligibility requirements.
  • The 20 percent mandatory federal withholding tax is waived for corona-virus related distributions (CRDs).
  • The requirement to take required minimum distributions (RMDs) for 2020 has been waived.

Tax and Legal Advice Disclaimer

This material has been prepared for information purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your tax, legal and accounting advisors before engaging in any transaction.

Responding to the Stay at Home Order & the COVID-19 Pandemic

Laura’s House has been quick to respond to COVID-19 and the ‘stay at home’ order, to best meet the needs for victims of domestic violence. As you probably have read in the News, this is an especially trying time for victims of abuse, when ordered to stay at home, and their home is simply not safe.

Responding to the Stay at Home Order & the COVID-19 Pandemic

Laura’s House was quick to respond to the orders, knowing that victims of abuse and our community would be relying on us for the vital resources and services we provide. As soon as March 18th, our counseling and therapeutic services were converted to a telehealth format, with clients meeting with our therapists and legal advocates using a secure, on-line platform. Our Emergency Shelter was prepped and put into effect new policies and waiting periods for entering new clients, and our safety-net hotel night program ramped up, enabling us to help those in urgent need by offering them bed nights with one of our local hotel partners. From the week of March 16 when the ‘stay at home’ order was issued to the following week, we saw a 40% increase in calls to our 24 hour Crisis Hotline. We also made the decision to enable our Heart Chat, (Text and IM feature for teens) to be used for the general population, and provide another way for victims of abuse to reach out to us for help. Orange County Sheriff and Laura’s House Board Member, Don Barnes has reported that domestic violence related calls to the Sheriff’s Department are up 20% over last year at this time.

Laura’s House has felt the need to continue to educate the community about updates to our services and programs, and how this effects the population we serve. Education and prevention is paramount to Laura’s House. In mid-March, we created a Webinar series, in English and Spanish, to provide information to the community on various topics including; Social Distancing and the Effects on Victims of Abuse, Legal Advocacy and Services, Anxiety and Techniques for Coping and Building Resilience, and our latest, Bystander Intervention: How to help someone you know is being abused. Our Webinar series is hosted weekly, generally on Wednesdays, and can be found on our Facebook @laurashouseoc, LIVE at the time of the webinar, Zoom and as a post each week on our FB page. We also have our entire series on the Laura’s House YouTube channel. Laura’s House has also been busy offering out to teachers our teen dating abuse prevention workshop, H.E.A.R.T., Healthy Emotions and Attitudes in Relationships Today (as we do in the traditional classroom), now via Zoom classroom. We have had many high schools participate and great feedback from some of our teachers. “The presentation was very similar to the in-person version. Students were able to use the "chat" feature to ask questions and participate in meaningful ways. It was fun being able to see my students' participate in regular school activities even though they were at their own homes.” Gwen Harris – Teacher, El Toro High School

We have been very happy to have been approached by multiple media outlets to contribute to news stories to bring light to the effects the pandemic has had on victims of abuse. Most recently, Laura’s House was featured on the front cover of the Orange County Register (April 20), the article titled Coronavirus: The worldwide surge in domestic violence has come to Orange County is a larger story focused on the rise of DV-related calls during the pandemic and how local agencies and nonprofits are pivoting to provide those in need with support.

We are very grateful for your partnership and commitment to our mission. We hope to continue to work together to meet the needs of victims of abuse here in Orange County and our surrounding counties. We know that for many it is a difficult time to reach out, but together we will be ready and positioned to help, inspiring hope and empowering change for a life free of abuse.

We hope you are staying healthy and safe!
Andrea McCallister
Director of Development & Communications