On March 26, 2020, Bernheim made the difficult decision to close in response to controlling the spread of COVID-19. Bernheim believes this was a necessary step to ensure the well-being and safety of our community, volunteers and staff. While the forest remains closed to the public, Bernheim’s earned revenue has been significantly impacted, relying solely on memberships and donations for income.
The new CARES (Coronavirus Aid, Relief, and Economic Security) Act makes it a little easier for donors, businesses and nonprofits experiencing financial set-backs due to COVID-19. Additionally, the CARES Act makes it easier for donors to contribute to non-profits. Bernheim has compiled a summary of pertinent provisions of the CARES Act to help you as you consider the best way to support Bernheim and other organizations.
This is not legal or tax advice, instead this is an information for discussion with your accountant and/or tax attorney.
The law allows an above-the-line income tax charitable deduction up to $300 ($600 for a married couple) even if you do not itemize your 2020 income tax return. The tax 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 – $300 or $600 goes a long way to deliver Bernheim’s mission!
The CARES Act impacts owners of Individual Retirement Accounts (IRAs) by suspending the requirements for Required Minimum Distributions (RMDs) for 2020. However, there is an opportunity to still use your IRA for charitable purposes. Check with your accountant to explore taking a distribution from your IRA and then offsetting the income with a charitable deduction, regardless of the amount. Please contact us to discuss making Bernheim the beneficiary of your IRA or other IRA giving opportunities.
Individual AGI Tax Deduction
For the 2020 tax year only, donors may deduct a 100% Adjusted Gross Income (AGI) for individual taxpayers who itemize their deductions. Gifts to Donor Advised Funds (DAFs) do not qualify. Beyond the scope of the CARES Act, the deduction for qualified charitable contributions made by itemizing individual donors is limited to 60% of their adjusted gross income.
Corporate Income Deduction
Prior to the CARES Act, corporations could deduct 10% of taxable income for charitable contributions. For the 2020 tax year, corporations can now deduct 25% of their taxable income for charitable contributions.
Now, more than ever, Bernheim needs your support! Whether-or-not the new CARES Act provisions benefit your individual or corporate tax situation, we hope you will consider a gift to Bernheim.
For more information about the CARES Act and how it might affect your individual and/or corporate charitable giving please contact your accountant or tax attorney.