Additional tax savings for gifts to Quad Cities Disaster Recovery Fund announced
On December 20, 2019, the Taxpayer Certainty and Disaster Relief Tax Act was signed into law, designed to encourage public support for organizations providing disaster relief. Included among the provisions was a temporary enhanced tax benefit for donors making cash contributions to these charitable organizations. Specifically, the new law eliminates certain limitations that act to cap a taxpayer’s charitable tax deduction if the taxpayer makes a qualified contribution for disaster relief.
Normally, individual taxpayers may claim a charitable tax deduction for a cash gift to a public charity up to an amount equal to 60 percent of the taxpayer’s adjusted gross income (AGI). Any amount that exceeds 60 percent of AGI may be carried forward for five years.
Under the new law, this limitation is removed temporarily, and a taxpayer may claim a charitable deduction of up to 100 percent of AGI for a cash gift to a public charity supporting disaster relief.
To take advantage of the enhanced tax deduction, the following requirements apply:
The contribution must be paid in cash during the period beginning January 1, 2018 and ending on February 18, 2020.
The contribution must be made to a public charity, including the Quad Cities Community Foundation for the Quad Cities Disaster Recovery Fund.
The contribution must be made specifically for relief efforts in one or more areas for which a major disaster was declared by the President of the United States. FEMA approved disaster declarations include the 2019 Illinois Severe Storms and Flooding and 2019 Iowa Severe Storms and Flooding, for which the Quad Cities Disaster Recovery Fund was implemented.
The donor must obtain from the charity a contemporaneous written acknowledgment satisfying the normal IRS rules plus confirmation by the charity that the gift was used, or will be used, for relief efforts described in item 3.
If you would like an additional acknowledgement stipulating your gift to the Quad Cities Disaster Recovery Fund was used for approved disasters please contact our office and we will be happy to prepare one for you. Please contact Melanie Jones at (563) 326-2840 or MelanieJones@QCCommunityFoundation.org.
Other charitable deductions claimed by the taxpayer in the tax year will be taken into consideration so the enhanced deduction is allowed only to the extent it does not exceed the excess of AGI over these other charitable income tax deductions allowable under the normal rules. Because the benefit applies to contributions that were made in 2018, a taxpayer may need to file an amended 2018 tax return to claim the enhanced deduction.
Have questions?
We’re here to help. Contact Melanie Jones at (563) 326-2840 or MelanieJones@QCCommunityFoundation.org for details.