New Tax Relief Act Can Benefit Local Charities

October 18, 2005 == MEDIA ADVISORY

In response to Hurricane Katrina the United States Congress passed the Katrina Emergency Tax Relief Act of 2005.

Calvin College Sally VanderPloeg is director of planned and major gifts for the college and says the new tax act can benefit all charities, not only those charities that are working with those impacted by Katrina.

"This new act," she says, "is a response to what happened after 9/11 when many charities saw giving drop significantly because so many people had given to 9/11-related organizations. After Katrina Congress saw a need to encourage giving to charities working on Katrina efforts, but also wanted to encourage giving to other charities. The new tax act is intended to encourage both kinds of giving."

Calvin is alerting its donors to the possibilities in the new tax act, but VanderPloeg also wants other area non-profits to understand the implications of the act.

"Right now the act is only a few weeks old," she says (it passed on September 23), "but it expires at the end of 2005 so there's a lot of communication that needs to happen to let people know how they can benefit from what Congress did."

VanderPloeg, who has both law and accounting degrees, says that there are several advantages to donors under the new act.

The new legislation will provide for the following:

-Cash gifts by individuals between August 28 and December 31, 2005, will be deductible up to 100% of adjusted gross income (AGI).
-Cash gifts by individuals between August 28 and December 31, 2005 will not be subject to the itemized deduction phaseout for AGI over $145,950.
-Gifts of IRA assets for people age 59 ½ and older will generate taxable income, but will also be eligible for a 100% AGI deduction limit.

On this last provision VanderPloeg says donors should consult with their tax advisor as there may be unexpected state tax consequences in certain states to an IRA gift.

VanderPloeg also notes that corporations receive special treatment only if they make a gift to a Katrina relief organization and that gifts to a private foundation or through a donor advised fund do not qualify for the special treatment under this new legislation.

Contact Sally VanderPloeg at 616-526-7112 or 800-968-4363.
For more on Calvin Development see http://www.calvin.edu/admin/development/planned_giving/team.htm
Also see http://www.irs.gov/newsroom/article/0,,id=149391,00.html

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Received on Tue Oct 18 12:36:36 2005