CARES Act

NEWS: IMPACT ON GIVING UNDER THE CARES ACT

We are grateful for the generous donors who have supported our work over the years and continue to do so as we adapt in response to the COVID-19 pandemic. To help you make the most of your giving, we would like to bring to your attention new tax rules for charitable giving included in the Coronavirus Aid, Relief and Economic Security Act — the CARES Act.

You may deduct gifts of cash to most public charities to offset as much as 100% of your adjusted gross income! For the 2020 tax year only, you may deduct cash contributions to the Medical Center 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 charitable 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 advisers to determine whether the 100% deduction makes sense for your 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. A married couple can reduce taxable income by $600 for these contributions.

Required Minimum Distributions from retirement plans are waived for 2020. Most Required Minimum Distributions from retirement plans have been eliminated for 2020. Check with your financial adviser to see how this temporary rule will apply to you. 

You have important priorities for your family and loved ones, and 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 help us advance health care for generations to come. 

Please contact Tim Kaltenbach at giftplanning@vumc.org or 615-343-3119.