Like you, Baystate Health Foundation is adapting and changing in response to the COVID-19 pandemic. Baystate Health Foundation is grateful for your generous support of our lifesaving and life-enhancing work over the years. As we adapt to our new reality, the Foundation would like to bring to your attention new tax incentives for charitable giving that are included in the Coronavirus Aid, Relief and Economic Security (CARES) Act.
- Donors may deduct up to 100% of cash contributions to public charities such as Baystate Health Foundation (BHF). For the 2020 tax year only, you may deduct cash contributions to BHF and most public charities up to 100% of your adjusted gross income (AGI). Ordinarily these deductions would be limited to 60% of your adjusted gross income. What this higher limit means is that especially generous donors may reduce their 2020 federal income tax to zero while making a big impact. Donors who are even more generous, who exceed the 100% election, may carry forward unused cash contribution deductions for up to five years. Please note that contributions to donor advised funds or supporting organizations are not eligible for this special deduction.
- The 100% election may not always be the tax-wise choice. Because federal income tax is progressive, it may not necessarily be to your advantage to deduct 100% of cash contributions in 2020. Please check with your financial or other advisors to determine whether the 100% election makes sense for your specific circumstances.
- Taxpayers who do not itemize are eligible for a special $300 charitable contribution deduction in 2020. If you do not itemize your taxes in 2020, you can still reduce your tax income by up to $300 for contributions of cash to Baystate Health Foundation and/or another public charity. A married couple can reduce taxable income by $600 for these contributions.
- Required minimum distributions (RMD) from retirement plans are waived for 2020. Most required minimum distributions from retirement plans have been eliminated for 2020. Please check with your financial advisor to see how this temporary rule will apply to you.
- Qualified charitable distributions are still a great way for donors age 70 ½ or older to make contributions. If you are 70 ½ or older, a qualified charitable distribution (QCD or IRA Charitable Rollover) allows you to contribute up to $100,000 from your traditional IRA to Baystate Health Foundation without paying income tax. Although, for those age 72 or older, the usual benefit of counting toward your RMD has been waived for 2020, a qualified charitable distribution may provide tax advantages and help you save other assets for heirs. Please check with your financial advisor to see how this might work for you.
Baystate Health Foundation understands that the health and well-being of your family and loved ones comes first, yet the CARES Act offers additional tax incentives to encourage charitable giving in 2020.
To learn more about the ways you can support Baystate Health, contact Director of Philanthropy Kathleen Bronner at 413-794-7798 or Kathleen.Bronner@BaystateHealth.org.
Please note that this information should not be considered legal, accounting or other professional advice. Please consult your professional advisor.