2020 Year-End Charitable Giving

As you consider your 2020 year-end charitable giving, thank you for keeping MercyOne Des Moines Foundation in mind.

The Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law on March 27, 2020. This act is designed to help you, businesses and nonprofits facing economic hardship during the coronavirus pandemic.

The CARES Act provides increased tax incentives that may be beneficial to donors who have a pledge to the MercyOne Richard Deming Cancer Center or are planning to make a gift to MercyOne Des Moines Foundation this year. Below are a few tips you should know before the end of 2020. The following is not intended to be legal or tax advice. Please consult your advisor to determine if the information fits your personal situation.

For donors who are itemizing deductions:

The adjusted gross income (AGI) deduction limit for cash contributions was increased for individual donors. For cash contributions made in 2020, you can now elect to deduct up to 100 percent of your AGI (increased from 60 percent). This is beneficial to keep in mind as you are planning your pledge payments, as it may be advantageous to consider a larger pledge payment in 2020.

What about IRA qualified charitable distributions (QCD)?

The CARES Act did not change the rules around the QCD, which allows individuals over 70½ years old to donate up to $100,000 in IRA assets directly to MercyOne Des Moines Foundation annually, without taking the distribution into taxable income.

However, remember that under the CARES Act, an individual can elect to deduct 100 percent of their AGI for cash charitable contributions. This effectively affords individuals over 59½ years old the benefits similar to a QCD; they can take a cash distribution from their IRA, contribute the cash to charity, and may completely offset tax attributable to the distribution by taking a charitable deduction in an amount up to 100 percent of their AGI for the tax year.

If you’re planning a large donation in 2020, this may be a smart strategy as long as you are between the ages of 59½ and 70½ and are not dependent on existing retirement funds.

For corporate donors:

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

Not itemizing?

The CARES Act allows for an additional, “above-the-line” deduction for charitable gifts to MercyOne Des Moines Foundation made in cash of up to $300. If you are not itemizing on your 2020 taxes, you can claim this new deduction.

We are deeply grateful for your continued kindness and support during this difficult time. Please find additional resources on our planned giving pages.

Please contact Joan M. Bindel, CFRE at jbindel@mercydesmoines.org or 515-643-8020 to discuss how your gift can help further our mission.