SECURE and CARES Acts – the Impact on Charitable Giving
Dawn Jinsky
Partner, CPA, CFP®, Leader of Estate and Business Transition Planning
As the leader of the firm’s wealth transfer practice, Dawn educates clients in the who, what, when, and where of transferring their assets in the most tax-efficient manner. High-net-worth individuals, families, and business owners come to Dawn for help with meeting their estate planning, philanthropic, and business transition goals.
SECURE Act
- IRA contributions
- Required minimum distribution age
- Qualified charitable distributions (QCDs)
Stretch provision eliminated
Entire inherited IRA must be distributed within 10 years of owner’s death, Exempt beneficiaries include: spouses, minor children, disabled, charities and charitable trusts.
Consider a Charitable Trust
Utilize exemption to the 10-year tax acceleration rule by establishing a Charitable Remainder Unitrust (CRUT) or Charitable Remainder Annuity Trust (CRAT) and name it as the beneficiary of your IRA. If married, still consider naming spouse as the primary beneficiary.
CARES Act
Itemizing
- For cash contributions made in 2020, individuals can now elect to deduct up to 100 percent of AGI (increased from 60 percent).
Not itemizing
- An additional, “above-the-line” deduction for charitable gifts made in cash of up to $300 is available. Individuals not itemizing 2020 taxes can claim this new deduction.
Corporate giving
- Corporations can now deduct up to 25 percent of taxable income (increased from 10 percent).
IRAs and Qualified Charitable Distribution (QCD)
- Individuals over 59½ can take a cash distribution from their IRA, contribute the cash to charity and potentially 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.
- Even though RMDs have been eliminated in 2020, individuals over 70½ can donate up to $100,000 in IRA assets directly to charity annually, without taking the distribution into taxable income.
Philanthropy enables the Karmanos Cancer Institute to be a leader in cancer research leading to therapeutic breakthroughs that continue to define new standards of care and provide patients with hope.