Darlington School: Private Boarding School in Georgia CARES Act for Nonprofits: What does it mean for Darlington?
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CARES Act for Nonprofits: What does it mean for Darlington?

Joe Montgomery | April 20, 2020 | 405 views

We’re all in this fight against the Coronavirus together. In response to the health crisis facing our nation, the Coronavirus Aid, Relief and Economic Security (CARES) Act became law in March. Most of the reporting surrounding the Act has focused on the economic relief that will be coming to individuals and businesses, but there are provisions contained in the Act that impact charitable giving options for individuals who are interested in supporting Darlington School during these unprecedented times. There are two provisions contained in the Act that I would like to highlight here, a new $300 deduction and new charitable deduction limits.
 
I hope to answer questions you may have in thinking about how you can take advantage of the opportunities provided by the CARES Act while supporting Darlington.

Above-the-line charitable deduction for cash contributions of $300 per individual:

Q.
How is the new $300 deduction different from the regular charitable contribution deduction?

A.
Basically, beginning in 2020, you can take a $300 above-the-line charitable tax deduction ($600 for married couples) for a cash contribution to Darlington School, regardless of whether or not you itemize on your tax return. Usually, only those who itemize qualify for the charitable contribution deduction. 

The new $300 deduction from the CARES Act is specifically for those who don’t itemize their deductions and would not get any tax benefit for donation. In plain English, if you donate up to $300 in cash to Darlington School, your adjusted gross income (AGI) will be reduced by up to $300. This applies to cash gifts only.

Q.
Can you take the new $300 deduction if you itemize deductions?

A.
No; if you itemize, you will still claim all of your charitable donations on 
Schedule A – no double-dipping.

New Adjusted Gross Income (AGI) limits for itemizers:

Q.
If I do itemize, does the CARES Act affect the regular charitable contributions deduction too?

A.
It does for those who are very philanthropic. The CARES Act raised the bar for the deductible amount of donations for those itemizing deductions, too – it’s now up from 60% to 100% of AGI, so (hypothetically) you could donate your entire year’s income and walk away with no taxes owed. Any excess charitable deduction can be carried forward for five years. Additionally, corporations may deduct up to 25% of taxable income for charitable donations, up from the previous limit of 10%.

Generally, how does the new CARES Act help provide COVID-19 relief?

Providing tax benefits for individuals who support charitable causes means that any taxpayer, regardless of whether they itemize, can now get a tax break for their generosity. It’s an incentive to give in 2020 and have less taxes owed when you file in 2021, so alumni, parents, and friends of Darlington are encouraged to help the school now, when it’s needed most.

This information is not intended as legal or tax advice. Please speak with your professional advisors for information specific to your individual situation. For more information you can reach out to me, working remotely, by calling my cell phone at 770-547-3813.

The COVID-19 pandemic is a tragic, unprecedented event, but we are stronger together and will rise above it. Stay safe, stay healthy, and thank you for your enduring support of Darlington School.

As we sing in the alma mater….Forward ever be our watchword, conquer and prevail!