The Coronavirus Aid Relief and Economic Securities Act, known as the CARES Act, was passed in March to help combat the far-reaching impact of Covid-19.  It includes significant tax relief and charitable giving benefits to donors.

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Are you itemizing deductions?

The adjusted gross income (AGI) limit for cash charitable contributions was increased for individual donors.  For cash contributions made in 2020, you can now deduct up to 100% of your AGI (increased from 60%).  For example, if your AGI is $100,000, you may deduct $100,000 in charitable contributions and wipe out your income tax liability entirely.   This contribution cannot include any amount which is carried over from a prior tax year.

Not itemizing?

The CARES Act allows for an additional “above-the-line” deduction for charitable gifts made in cash of up to $300.  If you are not itemizing on your 2020 taxes and taking the standard deduction, you can claim this new deduction.  This deduction will also be available after 2020.  Remember that the IRS requires that taxpayers keep a written record of all contributions.

Interested in corporate giving?

The AGI limit for cash contributions was also increased for corporate donors.  Corporations can now deduct up to 25% of taxable income (increased from 10%).  Donations in excess of 25% may be deducted in the following 5 years. 

Learn more about charitable contribution deductions.