Recently, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to address the economic concerns of the current pandemic. This act has provided needed funds to Sheridan to assist with payroll and utility payments for eight weeks. The funds allowed us to continue to pay our staff and not need to furlough or reduce hours for any of our employees.
Another section included in the act provides an incentive to contribute to nonprofit organizations. The goal of the incentive is to encourage charitable contributions to financially boost nonprofits struggling in this time.
While donors will need to wait until the 2021 tax season for the benefits outlined in the CARES Act, churches, ministries, and nonprofit organizations can benefit from cash donations now. Changes relating to 2020 charitable contributions:
- The 60% adjusted gross income limitation for cash charitable contributions is expanded to 100% of adjusted gross income for 2020.
- Taxpayers can take up to a $300 deduction for cash donations when they file their 2020 taxes in 2021.
- The $300 deduction is available only to those who do not itemize and will be in addition to the standard deduction. This is known as an “above-the-line” deduction and is an important incentive; only about 13% of taxpayers choose to itemize over the standard deduction.
The act also eliminated Required Minimum Distributions (RMD) in 2020 but you may still make a Qualified Charitable Distribution (QCD) to a charity. This distribution is a direct transfer from your IRA payable to a qualified charity. Sheridan Lutheran Church qualifies for this type of distribution. This excludes the amount donated from your taxable income, unlike a regular IRA withdrawal. Please consult your tax advisor for more information on these changes.
In response to the pandemic, we chose to participate in applying for a Payroll Protection Plan (PPP) Loan, just one part of the CARES Act. Blessed by capable staff members and volunteers, Sheridan was able to procure a PPP Loan, the majority of which will be forgiven through the U.S. Government. The end result is that we have been able to keep our staff intact, rather than furloughing many of our 40+ employees, which would have added to the unemployment rolls. We remain so grateful for the combination of extra giving by members, as well as our stimulus package relief, which has made up for the reduced income the church has faced in these trying times.
We appreciate your commitment to ministry through your giving. John’s Gospel says, “Everything belongs to God because God made everything.” (John 1:1-3) We know that we are merely caretakers of what the Lord has provided and we recognize that we simply share in the abundance from God. Your gifts to the church allow us to continue to provide worship, partner with mission in Lincoln and the world and lead faith formation for all of our Sheridan community.