April 20, 2020
Here’s another great reason to consider a gift to the United Way of Greater Milwaukee & Waukesha County’s COVID-19 Urgent Needs Fund:
The CARES Act (Coronavirus Aid, Relief, and Economic Security Act), signed into law on March 27, provides additional incentives for those looking to give charitably during the 2020 tax year.
While we always recommend you talk to your own tax professional, below are the details for the standard deduction, itemized deductions, and corporate giving:
If you take the standard deduction...
Before this law, those taking the standard deduction didn’t get any tax benefit for their charitable donations. Under this new law, if you take the standard deduction when doing your taxes, the CARES Act allows for a one-time, above-the-line deduction of up to $300 in donations to qualified charities in 2020. This deduction is in addition to the standard deduction of $12,400 for an individual and $24,800 if filing jointly.
What this means for you: Because this is an “above-the-line” deduction, it will reduce your total taxable income by up to $300.
If you itemize your deductions...
This new law treats your first $300 of charitable giving as extra special. Prior to the CARES Act, an individual itemizing their deductions could only deduct 60% of AGI for charitable giving. If you itemize deductions when filing your 2020 taxes, the CARES Act allows you to deduct up to 100% of your AGI in contributions to qualified charities. Deductions of gifts in excess of 100% of AGI can be rolled over for use in future years.
If your organization wants to make a corporate gift...
The CARES Act now allows a deduction of up to 25% of the company’s adjusted taxable income for corporate gifts to qualified charities in 2020. The former limit was 10%.
Is United Way of Greater Milwaukee & Waukesha County a “qualified charity” under the CARES Act?
Yes. The new deduction rules apply to public charities like United Way while the old rules still apply for donations to private foundations and donor-advised funds. These new rules do not apply to donations of appreciated stock.
Now is a great time to take action and make a gift to support nonprofits in our community. United Way’s COVID-19 Urgent Needs Fund is responding daily to requests for support and supplies so local shelters, food pantries, and other essential organizations can continue to serve our community. Donate today.