Each person or married couples should consult with their own professional legal or financial advisor for the most accurate, up-to-date information to ascertain how the opportunities below may complement their own personal, philanthropic, and tax planning objectives.
Universal Deduction for Donations
For individual taxpayers that take the standard deduction, the CARES Act will allow above-the-line deductions of contributions up to $300 on your 2020 federal tax return.
If you are married-filing-jointly, taxpayers will get the above-the-line deduction up to $600.
Raising the Charitable Giving Deduction Cap
For individuals and joint filers who are able to itemize their deductions, the deduction cap of 60% is increasing to 100% of adjusted gross income.
For corporations, the law raises the annual limit from 10% to 25% of taxable income.
The CARES Act Fine Print for Gifts
Gifts must be made to a 501(c)(3) public charity (like the A.R.T.!).
Gifts must be made in cash to qualify and does not apply to those made to donor advised funds.
Gifts must be made in 2020.
Standard Deduction Only
Gifts made are eligible for the above-the line deduction in addition to the standard deduction.
Charitable Giving Deduction Cap Only
Gifts must be made in cash to qualify for the 100% of AGI deductibility. The limit for gifts of property is unchanged as a result of The CARES Act.
Is this a permeant change to tax incentives for charitable giving?
No. Gifts must be made in 2020.
Do the gifts have to be applied to a COVID-19 Emergency Fund?
The donation does not have to be related to COVID-19 relief efforts.
Are the CARES Act deductions limited to charitable contributions made this year?
The new above-the-line deduction of $300 available to non-itemizing individual taxpayers is not restricted to donations made in 2020, and it is foreseen to survive the CARES Act.
However, to qualify for the enhanced deduction limits of 100% for itemizing individual taxpayers and 25% for corporations, the charitable contributions must be made during the 2020 calendar year.