NOTE: The following is not legal advice or a legal reading of the CARES Act. Please discuss these opportunities with your Board, legal counsel or other advisors before sharing with your financial partners.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress with overwhelming, bipartisan support and signed into law by President Trump on March 27th, 2020. It includes charitable tax deductions for some that are only available this tax year (2020).
Part of the 2020 CARES Act offers a new universal deduction for charitable contributions. The bill makes a new deduction available, without itemizing, of up to $300 per taxpayer ($600 for a married couple) in annual charitable contributions in 2020. For those who itemize in 2020 only, the CARES Act allows deductions of contributions up to 100% of their adjusted gross income. Corporations may increase giving to 25% of their taxable income.
For 2020 only, the CARES Act allows itemizers to deduct contributions up to 100% of their AGI. Thus, for example, if someone’s AGI is $100,000, they may deduct $100,000 in charitable contributions and wipe out their income tax liability entirely.
Donors who use this provision must tell the IRS. Any contributions in excess of total AGI may be carried forward for up to five additional years
Usually giving is limited to 10% of taxable income for the corporation. That limit has been increased to 25% of the taxable income, making charitable gifts much more attractive to business donations.
HR 748 Sec. 2204 and Sec. 2205
This information originally provided by Greg & Elaine Long and The Non-Profit Authority and Heartbeat International.