The 2020 CARES Act provides enhanced benefits for individual donors and corporations designed to benefit non-profit organizations in need. To learn more about the new benefits for donors, read on or contact Development Director Allison Hannon at firstname.lastname@example.org.
Temporary Universal Charitable Deduction - Taxpayers who do not itemize their deductions can take a one-time deduction of up to $300 for gifts made to charitable organizations. The provision is intended only for the year 2020; however, in the text of the bill, it states taxable years beginning in 2020 and does not include a sunset date, thus it conceivably could extend beyond 2020. The deduction is ONLY for gifts of cash made in calendar year 2020 and does not cover other types of gifts or contributions made to donor-advised funds or private foundations.
Suspends the 60 percent adjusted gross income limitation for individuals' charitable contributions for the year 2020. In a typical year, individuals can only take a charitable deduction of up to 60 percent of their adjusted gross income, no matter how much they give. For 2020, there is no limit, making cash contributions fully deductible.
Increases the cap on how much corporations may deduct for charitable gifts from 10 percent of taxable income to 25 percent. In addition, the limitation on deductions for food donations by corporations increases from 15 percent to 25 percent in 2020.
The information provided here is not intended as legal or tax advice. For advice on your individual circumstances, please consult an attorney or tax advisor. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual situation.