CARES ACT IMPACT ON CHARITABLE GIVING

Details About CARES Act

The inclusion of an expanded charitable giving incentive is a critical acknowledgement by Congress that the work of nonprofits like Spokane Valley Partners are essential services. Indeed, now more than ever families are facing hunger and poverty. It is the first time Congress has passed this type of giving incentive in response to disaster or national emergency.

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Universal Deduction for Donations Up to $300

For people who no longer itemize their charitable giving, the CARES Act will allow these individual taxpayers to deduct donations to charity of up to $300 on their 2020 federal tax return, even though they take the standard deduction. Contributions to donor-advised funds or giving accounts is still the old limit of 60%.

Raising the Charitable Giving Deduction Cap

For donors who itemize their deductions, and therefore directly write off gifts to charity, the current deduction cap is 60% of adjusted gross income (AGI). The 60% of AGI limit is for giving to 501(c)(3) public charities.

The deductibility of gifts to 501(c)(3) private foundations is capped at 30% and was not included in this legislation. Corporations are able to deduct charitable donations up to 10% of taxable income as well. The CARES Act lifts these caps to 100% for individuals and joint filers, while corporations will see their cap lifted to 25% for 2020.

This information is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results.