CARES Act Expands Tax Deductions for Charitable GivingApril 7, 2020
The new Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. The act is a $2 trillion economic stimulus package created to provide assistance to individuals and businesses in response to the COVID-19 pandemic. In addition to individual rebates, expanded unemployment insurance, and assistance for small business, the CARES Act also includes the following provisions for individual and corporate donors:
- A one-time, above-the-line deduction of up to $300 for cash contributions made to qualifying charities. All taxpayers would be eligible, including those taking the standard deduction. It would apply to cash gifts made in 2020.
- For taxpayers who itemize their deductions, the cap on annual contributions in 2020 will be raised from 60 percent of adjusted gross income (AGI) to 100 percent.
- For corporations, the limit on deductions for contributions is elevated from 10 percent of AGI to 25 percent for 2020. Food donations would be available to 25 percent, up from the current 15 percent cap.