PG Calc Blog

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2020 is Almost Over (Phew!) and the CARES Act is Expiring

The CARES Act and 2020 Charitable Tax Benefits Legislation known as the CARES Act introduced significant incentives to stimulate charitable giving in response to the Covid-19 pandemic. Some of those important tax incentives expire on December 31, 2020. Your donors will need to act quickly to take advantage of these tax-smart ways of giving before they are gone. Listed below are the most significant provisions applicable to charitable giving included in the CARES Act.

The SECURE Act and Gift Planning

The SECURE Act and Gift Planning

After lingering in limbo in the U.S. Senate for months, the “Setting Every Community Up for Retirement Enhancement” Act, aka the SECURE Act, was among several bills attached recently to a “must-pass” appropriations bill that was signed into law on December 20, 2019. The SECURE Act includes many changes to the rules governing retirement plans, including several provisions of particular interest to gift planners. All the rules described below became effective on January 1, 2020.

QCDs Done Right

Remember when planned giving called the Qualified Charitable Distribution (QCD) the charitable IRA rollover? Remember when we didn’t know if we could ask donors to make such gifts until the last minute each year? The Internal Revenue Code defined the concept of a charitable IRA rollover as a QCD when the legislation passed all the way back to 2006. The QCD was part of a package of tax extenders that expired every December 31 unless reinstated by Congress. There were years of waiting and waiting for reinstatement of the extenders package. IRA administrators weren’t sure what to do with the QCD and planned givers kept referring to this as the charitable IRA rollover. All that changed in 2015 with the passage of the PATH Act. That legislation made the QCD permanent law and while the expression “charitable IRA rollover” still remains in some marketing materials as a synonym, it is used less often to avoid confusion.

IRA Charitable Rollover for 2015 Experiences Turbulence

IRA Charitable Rollover for 2015 Experiences Turbulence

The word from Washington, DC is that tax reform has stalled in Congress until after the 2016 election. And what about the tax extenders, including the now-expired IRA charitable rollover? As of a couple of weeks ago, Congress appeared to be on a slow glide path to vote through a 1-year extension for 2015 in mid to late December. It is still possible that Congress might fear the ire of frustrated supporters and constituents during the 2016 election year enough to vote through a 2-year extension for 2015 and 2016. It is also possible the extension could stall out, and John Boehner leaving the pilot seat as House Speaker may factor into that.

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