Like you, Massachusetts General Hospital is adapting and changing in response to the COVID-19 pandemic and the accompanying economic uncertainty. We are grateful for your generous support of our work over the years and would like to bring to your attention to new tax rules for charitable giving included in the recently enacted Coronavirus Aid, Relief, and Economic Security Act, the CARES Act.
Key Highlights from the CARES Act:
- You may deduct gifts of cash to most public charities to offset as much as 100% of your income
- It might not be the tax-wise choice to deduct up to 100% of your income
- If you don’t itemize you may reduce your taxable income by $300 for your charitable contributions in 2020
- The CARES Act will waive the required minimum distribution from retirement plan for 2020
You may deduct gifts of cash to most public charities to offset as much as 100% of your income!
For the 2020 tax year, you may deduct cash contributions to Mass General to offset up to 100% of your income. Ordinarily, the income tax charitable deduction for cash gifts is limited to 60% of your income. This 100% limit allows especially generous donors to reduce their 2020 federal income tax to zero. If you are even more generous you can carry forward unused cash contribution deductions for up to five years.
It may not be the tax-wise choice to deduct up to 100% of your income.
Because federal income tax rates are progressive, it is not a given that it will be to your advantage to deduct 100% of your cash contributions in 2020. Check with your financial or other advisors to determine whether the 100% deduction makes sense for your specific circumstances.
If you don’t itemize you may reduce your taxable income by $300 for your charitable contributions in 2020.
If you do not itemize your deductions in 2020, you can still reduce your taxable income by up to $300 for contributions of cash to public charities using an “above the line” adjustment to reduce your taxable income even if you don’t itemize.
Required minimum distributions from retirement plans are waived in 2020.
The CARES Act has eliminated most required minimum distributions from retirement plans for 2020. Check with your financial advisor to see how this temporary rule will apply to you.
Charitable Giving under the CARES Act
Remember, qualified charitable distributions are still a great way to make contributions. If you are 70½ or older, a qualified charitable distribution (“QCD” or “IRA charitable rollover”) allows you to make a tax-free gift of up to $100,000 to Mass General from your IRA.
You have important priorities for your family and loved ones. We know that their health and financial well-being comes first. When you are ready, we will be here to help you shape a charitable gift plan that suits your needs and allows you to keep helping with our important work.
For more information, please contact the Office of Planned Giving at firstname.lastname@example.org or (617) 643-2220.