We would like to remind you of ways you can contribute to St. Mary Parish, particularly at year end. There are some temporary changes due to the CARES (Coronavirus Aid, Relief, and Economic Security Act) Act that may benefit you and the parish.
Please be aware that these suggestions should not be considered tax advice and individuals should consult with their tax advisors to determine the tax consequences of any contributions. Except for the Colorado Child Care Tax Credit, the following information relates to an individual’s Federal income tax determinations. Previously, charitable contributions could only be deducted if taxpayers itemized their deductions. For 2020, taxpayers who don’t itemize deductions may take a charitable deduction of up to $300 for cash/check/credit card contributions made in 2020 to qualifying organizations including religious, charitable, educational, scientific or literary in purpose.
The CARES act also increased the limit of donations to public charities, for those taxpayers that itemize, from 60% of adjusted gross income (AGI) to 100% of AGI for individuals and joint filers qualified contributions. A corporation may deduct qualified contributions of up to 25 percent (it was limited to 10% previously) of its taxable income. To qualify, the contribution must be:
• a cash contribution
• made to a qualifying organization
• made during the calendar year 2020. The new deduction limits are only for cash/check/credit card gifts. These new limits do not apply to gifts of appreciated stock.
Donations of stocks, bonds or mutual funds held for longer than one year, can be a great way to make a charitable contribution and avoid the taxes on any appreciation in the investment’s value. When donating noncash investments to charity, donors can generally take a tax deduction for the full fair market value up to 30% of an individual’s AGI.
Individuals may still make contributions directly from an IRA to a charity. For those who are over age 70½, qualified charitable distributions from an IRA of up to $100,000 are still allowable in 2020. Even though required minimum distributions from IRAs were suspended for 2020, an eligible individual may make direct charitable donations from his or her IRA in 2020, and the direct charitable distribution of up to a maximum of $100,000 will not be included in the taxpayer’s income (the charitable donation will not be deductible)
COLORADO CHILD CARE TAX CREDIT
Taxpayers that make a qualifying monetary contribution to promote childcare in Colorado may claim an income tax credit of 50% of the total qualifying contribution. The credit a taxpayer can claim for qualifying contributions made during a tax year is limited to $100,000. In-kind contributions of services or property (non-monetary donations including stock) do not qualify for the credit. The Parish MUST provide a completed Child Care Contribution Tax Credit Certification (Colorado
Form DR 1317 – see link below.) to the donor. The donation must be made a licensed childcare facility that uses the donation to provide child care.
More information may be found at the following links:
LINK TO CO STATE EXPLANATION of Credit: https://www.colorado.gov/pacific/sites/default/files/Income35.pdf
LINK TO DR 1317 CERTFICATION FORM: https://www.colorado.gov/pacific/sites/default/files/DR1317_2013.pdf
Again, if you have any questions, we recommend that you consult with your tax advisor to determine the tax consequences of any contributions.