On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed in response to the outbreak of Covid-19. We wanted to share some tax aspects of the legislation that pertain to charitable giving. First, to accommodate the large percentage of taxpayers who do not itemize their deductions (only 8% of people itemized in 2018), the CARES Act allows individuals to make cash contributions, up to $300 “above the line” in computing their gross income. In other words, for 2020 and beyond, taxpayers will receive the deduction on top of their standard deduction. This option is only available for individuals who have not itemized in the past and wish to continue using the standard deduction. For those who do itemize, this new law temporarily lifts the limit on charitable giving in 2020. In the past, contributions were generally limited to 60% of the donor’s adjusted gross income (AGI). The CARES Act now allows donations up to 100% of the donor’s AGI. For our corporate donors, this limit would increase from 10% to 25% of their adjusted taxable income. *Your tax benefit is dependent on your personal income level and filing status. We urge you to consult with your tax professional to develop the best plan for your personal situation.
Idaho Education Tax Credit:
Take Advantage of the Idaho Education Tax Credit!
As an Idaho taxpayer, your donations to Foothills School of Arts and Sciences may be eligible for a 50 percent education tax credit. This credit is available regardless of whether or not you itemize deductions. For those who do itemize, the deductions may become even greater.
Note: A tax credit is a reduction to the actual tax you owe or an increase in your refund.
Idaho Married Couples may take up to 50% of a $2,000 gift (a tax credit of $1,000)
Idaho Individuals may take up to 50% of a $1,000 gift (a tax credit of $500)
Idaho Corporations may take up to 50% of a $10,000 gift (a tax credit of $5,000)
Your tax benefit is dependent on your personal income level and filing status. Please contact your tax consultant for additional information.
Example: Fred and Frieda Foothills are an Idaho married couple who itemize their taxes. Together they have a taxable income of about $75,000 (25% tax bracket). They wish to donate $2,000 to the Annual Campaign this year.
Their gift qualifies for: $145 tax benefit for itemizing deductions** + $1,000 Idaho Education Tax Credit.
With these deductions and the Idaho education tax credit, a $2,000 gift to Foothills School of Arts and Sciences has an actual cost to them of only $421.
Your tax benefit is dependent on your personal income level and filing status. We urge you to consult with your tax professional to develop the best plan for your personal situation.
**These deduction numbers use a 22% income tax bracket and itemized deductions for federal taxes, and a 6.925% tax bracket for Idaho.
*Visit Idaho's Legislature website for more information.