CARES Act Charitable Giving

  • The MSUM Foundation is grateful for your generous support. As we continually adapt to changes brought on by the COVID-19 pandemic and its effects on our economy, we would like to inform you of new tax rules for charitable giving.

    The recently enacted Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, is designed to help businesses, nonprofits and you as we face economic hardship during the coronavirus pandemic.

    Here are a few key provisions of the CARES Act that may affect you and your charitable goals:

    Required minimum distributions suspended
    The new law temporarily suspends the requirements for required minimum distributions (RMD) for the 2020 tax year. This probably comes as a relief to many of you who would have had to withdraw from your retirement accounts. Many of our donors use their RMD to make a gift from their IRA. Despite the RMD suspension, remember that if you are 70½ or older, you can still make a gift from your IRA or name the MSUM Foundation as a beneficiary.

    Why a gift from your IRA may still be a good idea

    • Your gift will be put to use today, allowing you to see the difference your donation is making.
    • You pay no income taxes on the gift. The transfer generates neither taxable income nor a tax deduction, so you benefit, even if you do not itemize your deductions.
    • Since the gift doesn’t count as income, it can reduce your annual income level. This may help lower your Medicare premiums and decrease the amount of Social Security that is subject to tax.
        

    New tax incentives
    The CARES Act expands charitable giving incentives and allows taxpayers who take the standard deduction to make up to $300 of charitable contributions to qualified charities this year. You might think this is a small amount and would not make a difference. But what if all of our donors gave “just” $300? Such support would have a huge impact on those whom we serve at MSUM.

    For those who do itemize their deductions, the new law allows for cash contributions to qualified charities such as the MSUM Foundation to be deducted up to 100 percent of your adjusted gross income for the 2020 calendar year.

    Your charitable goals
    We are deeply grateful for your continued kindness and support. Please contact Kristin Johnson of the MSUM Foundation 218.477.2774. She will connect you with a development officer who can discuss how your gift can help transform lives.