By Rene Gellerman, President & CEO of the United Way of the Quad Cities
In just over a month, COVID-19 has turned life in the Quad Cities upside down. Despite all that has changed, I am heartened and filled with hope as I continue to hear the same question asked by Quad Citizens: “How can I help?”
This eagerness to lend a hand during the ongoing health and economic crisis gives us a glimpse into a brighter future for our community, one we all must work together toward. As we think about how we can best help our students, families and neighbors who have been hit hardest by this pandemic, now is an important time to consider the critical role nonprofits serve in stabilizing lives and our community.
Many local nonprofits, including the 36 community impact partners that receive funding from our United Way and the dozens we collaborate with, are on the front lines of the coronavirus response. As these organizations stretch their resources to meet urgent and basic needs of Quad Citizens, they need our help.
Fortunately, the CARES Act has made it easier for Americans to give generously to qualifying charities, including the United Way of the Quad Cities and our community partners. The COVID-19 stimulus package, signed into law March 27, has created a new financial incentive which will take effect in the 2020 tax year.
The measure grants taxpayers an “above-the-line” deduction for up to $300 in charitable donations. This means, come Tax Day 2021, if you take the standard deduction and give $300 to charity, you will get a $300 tax break in addition to the standard deduction.
The new law also created an incentive for those who file for itemized deductions. Taxpayers will be able to deduct up to 100% of their Adjusted Gross Income for contributions to qualifying charities in 2020.
Corporate donors will be rewarded for their charitable gifts, too. The CARES Act temporarily lifts the limit entities can deduct from their taxes from 10% to 25% of their Adjusted Tax Income for contributions to qualifying charities starting in 2020.
Since the mid-March launch of the Quad Cities Disaster Recovery Fund, generous individuals, local corporations and philanthropic partners, including United Way, have contributed more than $1 million to support to the local organizations working on the ground and helping people access basic necessities like food and shelter. Though this is a lot of money, the need continues to grow and evolve.
We don’t yet know how the effects of closed schools, shuttered workplaces and overwhelmed essential workers will play out in our neighbors’ longer-term education, health and incomes – particularly for those less fortunate – and a monumental challenge lies ahead for the human service community. What we do know is, we can and must come together to confront this challenge and take care of one another.
Congress has made it easier for us to help. We have plenty of options, which include multiplying your donation by giving through Birdies for Charity or donating directly to your favorite charity like United Way. More than ever, every dollar matters, just like every Quad Citizen.
Our community is resilient, and we will get through this together. I’m proud of the Quad Cities.
CARES Act Benefits for Tax Filers in 2021
The passage of the CARES Act made it easier to help the community by giving to the United Way of the Quad Cities and other local charities providing critical services during this health & economic crisis.
Here is the tax benefit break down for those taking standard deductions, itemized deductions and corporate giving:
For people who take the standard deduction, the CARES ACT allows you to take a tax deduction for contributions made to qualified charitable entities up to $300 per year starting in 2020 – this deduction is “above-the-line.” The 2020 Standard deduction is $12,400 for individuals and $24,800 for married couples filing jointly. Therefore, any donation to qualifying charities of up to $300 will be added to the standard rate of deduction. This deduction applies for 2020 and beyond.
For people who file for itemized deductions, the CARES ACT allows you to take a tax deduction of up to 100% of your Adjusted Gross Income (AGI) for contributions to qualifying charities starting in 2020. The new law temporarily lifts the limits on charitable giving from 60% of a taxpayer’s AGI to 100% for 2020.
For corporate donors, the CARES ACT allows an entity to take a tax deduction of up to 25% of their Adjusted Tax Income for contributions to qualifying charities starting in 2020. The new law temporarily lifts the limits from 10% of adjusted taxable income to 25% for 2020.