Our Healthy Church team decided with the rising number of COVID-19 cases locally and nationally that our Christmas Eve service will be a pre-recorded service. We hope you and your family can enjoy the service together in the comfort of your home. Thanks be to God for His unspeakable gift. Jesus is here! Merry Christmas!
Article from Virginia United Methodist Foundation
The CARES Act passed in late March 2020. This was the federal government’s initial relief package which included $2.3 trillion worth of provisions to help mitigate the impact of the pandemic. It was intended to help 90% of the U.S. population.
Breakdown of the some of the CARES Act provisions:
- The CARES Act suspends the required minimum distributions (RMDs) for 2020. This includes anyone who turned 70 1/2 in 2019 who were supposed to take their first RMD by April 1, 2020. This change applies to both the owners of the retirement account and beneficiaries who inherited the account taking a Stretch distribution.
- If anyone has already taken their RMD, there’s a 60-day rollover rule allowing them to reinvest it in the account.
- The Act also suspended payments and interest on federal student loans until January 2021.
- The CARES Act allows individuals to pull up to $100,000 from their vested retirement accounts as either a penalty-free disbursement or a loan to pay for expenses and disrupted income related to the pandemic. The distribution can be taken over a three-year period. You have to pay taxes on it or you have to pay it back, but you’re given three years to pay it back.
Charitable Changes from the CARES Act:
- The new legislation allows up to $300 given to a qualified charity to be claimed as an above-the-line deduction. This is a permanent change that’s available to taxpayers who don’t itemize their deductions.
- The CARES Act also effectively suspends the limit on individual taxpayers’ deductions from cash contributions to public charities for 2020. Prior to the Act, individuals could only deduct up to 60% of their annual gross income (AGI). That limit has been raised to 100%. The deduction is only for donations to qualified charities.
To take advantage of the CARES Act changes, the charitable donations have to be in cash, not in a donor advised fund or in stock. Individuals whose cost basis on marketable securities is less than current market value may prefer to sell themselves and capture the loss, donating the net proceeds in cash.
The CARES Act may have subsequent changes, as legislative action on COVID-19 relief is reconsidered. The staff at the Virginia United Methodist Foundation are not tax advisors, but we hope this information will help you as you think about your 2020 tax situation. Our churches need your help this year, and we hope you will consider carefully what you can give and have given to your church.
Authors: Tommy Herndon, Bo Bowden