Important Information on the CARES Act
Coronavirus Aid, Relief, and Economic Security Act
You will recall that in March, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion economic stimulus package legislated to battle the harmful effects of the COVID-19 pandemic. One aspect of the legislation provides immediate relief for nonprofits such as Saint John’s Abbey. But for it to bring relief to the abbey, or any other nonprofit, your help is needed.
The legislation allows for a new deduction in your taxes. For the current year, you can claim cash donations up to $300 per taxpayer ($600 for a married couple) in annual charitable contributions. This deduction 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 2020 adjusted gross income (AGI), thereby reducing taxable income. You calculate it by subtracting the amount of the donation from your gross income. Note: a contribution to a donor-advised fund (DAF) does not qualify for this new deduction.
Also, as part of the bill, individuals and corporations that do itemize can deduct much higher amounts of their contributions. Individuals can elect to deduct cash donations up to 100% of their 2020 AGI (up from 60% previously). For example, people who wish to donate $5,000, $10,000, $20,000, or more can deduct that full amount from their taxable income. Corporations may deduct up to 25% of taxable income, up from the previous limit of 10%. The old deduction rules still apply to contributions to private foundations. The higher deduction does not apply to donations directed to a DAF.
This legislation provides an excellent opportunity for you as a supporter of the abbey, or any of your favorite nonprofits, and as a taxpayer to assist at no real cost to you. However, the only way this legislation can help is if you donate.
Please take a moment to realize how your gift to the abbey can be a great help to us as we continue to deal with the Coronavirus.