'Clock is Ticking' for Year-End Giving
The Katrina Emergency Tax Relief Act (KETRA) of 2005 increased deductibility of cash gifts to qualified public charities from 50 percent to up to 100 percent of adjusted gross income.
Charity organizations and faith-based groups are encouraging year-end giving as needs remain countless and new congressional action creates tax incentives.
After Hurricane Katrina left tens of thousands of people homeless and caused billions of dollars in damage, Congress passed a bill in September changing the rules on deductions for charitable gifts.
The Katrina Emergency Tax Relief Act (KETRA) of 2005 increased deductibility of cash gifts to qualified public charities from 50 percent to up to 100 percent of adjusted gross income. Individuals required to take a distribution from their Retirement Account can also receive a deduction of up to 100 percent. Eligible contributions are gifts of cash given to any public charity, not just those involved in Katrina aid, between Aug. 28 and Dec. 31, 2005.
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With an increased contribution limit, the new tax incentives encourage the American public to donate during a critical time of need in America. Some of the public charities and faith-based groups urging contributions during the traditional time of giving include Lutheran World Relief, Focus on the Family, and InTouch Ministries.
A new survey revealed that six in ten consumers are unaware of the tax incentives despite efforts made to increase giving. The December 2005 survey from Kintera Inc., which supports nonprofit organizations in raising funds for such causes as hurricane relief, was conducted on more than 600 consumers.
Additional results showed that 53 percent of respondents will consider making additional charitable contributions or plan to consult their tax advisor about KETRA; 44 percent of consumers planning to give will donate online to meet the Dec. 31 deadline; 32 percent planning to donate will do so via mailed check; and 82 percent of consumers planning to give would consider donating up to $100 in light of KETRA.
"The clock is ticking for Americans to learn about and take advantage of these tax incentives," says Kintera CEO Harry E. Gruber, M.D.
