HOW DOES THE CARES ACT IMPACT YOUR GIVING?

 

New Charitable Deductions Available For Non-Itemizers

Taxpayers who do not itemize their deductions will be able to claim a charitable deduction of up to $300 for cash donations made in 2020. This means that you can add an additional $300 to your charity budget this year, recover a portion of it in tax savings, and help charities address extraordinary current needs. This is for everyone, even if you have no other itemization.

 

Charitable Contribution Limits Suspended For Individuals In 2020

The CARES Act suspends the existing 60% Adjusted Gross Income limitation for individual charitable contributions in 2020. With this new policy, individuals can now deduct donations up to 100% of their 2020 Adjusted Gross Income. This change only applies to cash contributions and gifts from donor-advised funds are not eligible.

The Act does not change the tax-deductibility of contributions made from your IRA.

There are no Required Minimum Distributions (RMD) from your IRA, but Qualified Charitable Distributions (QCDs) are still a smarter way to give: For individuals with IRA accounts, there are no Required Minimum Distributions (RMDs) this year. However, giving pre-tax funds out of your IRA will still lower your future tax burden compared to giving cash.

 

Charitable Contribution Limits Increased for Corporations

The CARES Act increases the current taxable income limit on cash contributions made by corporations from 10% to 25% for 2020.

 

*Please note that this is not meant as professional tax or legal advice: consult a qualified tax advisor or attorney about whether these provisions or any other provisions of the CARES Act may be beneficial to you.