Support Hartford HeathCare during the pandemic.
As we continue to navigate the coronavirus pandemic, your support is important in ensuring Hartford Hospital and Hartford HealthCare have the necessary resources in place to protect you and our fellow citizens when they are needed most. If you are willing to pitch in, we thought you should be aware of the charitable incentives within the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law in 2020.
Donors may deduct 100% of cash contributions to most public charities.
You may deduct cash contributions to Hartford Hospital and most other public charities up to 100% of your adjusted gross income (AGI). Ordinarily these deductions would be limited to 60% of your adjusted gross income. This higher limit will allow especially generous donors to reduce their 2021 federal income tax to zero. Donors who are even more generous can carry forward unused cash contribution deductions up to five years. Contributions to donor advised funds or supporting organizations are not eligible for this special election. Also note that the 100% limit is reduced dollar-for-dollar by other itemized charitable deductions, which means that your charitable deductions in 2021 cannot exceed 100%, but you may be able to carry unused charitable deductions forward to future years.
The 100% election may not always be the tax-wise choice.
Because federal income tax rates are progressive, it is not a given that it will be to your advantage to deduct 100% of your cash contributions in 2021. Check with your financial or other advisors to determine whether the 100% election makes sense for your specific circumstances.
Non-itemizers are eligible for a special $300 charitable contribution deduction in 2021.
If you do not itemize your deductions in 2021, you can still reduce your taxable income by up to $300 for contributions of cash to public charities.
Required minimum distributions from retirement plans are waived for 2020.
However, in 2021 you will have to take your RMD. This RMD is due by the end of 2021, not April 1, 2022. Check with your financial advisor to see how the changes in the CARES Act will apply to you.
Qualified charitable distributions are still a great way for donors age 70½ or older to make contributions.
If you are 70½ or older, a qualified charitable distribution (“QCD” or “IRA charitable rollover”) allows you to contribute up to $100,000 to the hospital from your IRA without paying income tax. A qualified charitable distribution remains a great way for donors to make tax advantageous contributions, especially donors who do not itemize their deductions.
The CARES Act, which was necessary to address the far-reaching effects of the COVID19 pandemic, provides additional tax incentives to encourage charitable giving. You have important priorities for your family and loved ones, and we know that their health and financial well-being comes first. When you are ready, we will be here to help you shape a charitable gift plan that suits your needs and allows you to keep helping with our important work.