Ways to Give

Coronavirus Aid Relief and Economic Security Act—or CARES Act

In response to the nation’s health crisis, the CARES Act became law in March of 2020. Key provisions impact charitable giving. Below is a brief summary.

Non-itemizers eligible for $300 tax deduction:

A reduction in taxable income is now available for individuals who take the standard deduction rather than itemize their deductions. This inclusion creates a new above-the-line charitable deduction for cash contributions of up to $300.  The adjustment does not apply to gifts made to a Donor Advised Fund.

Cap on deductions lifted:

For 2020 only, individuals who itemize may deduct annual contributions up to 100% of their adjusted gross income for cash gifts made to nonprofits. This could potentially negate the donor’s 2020 federal tax bill.  This adjustment may be attractive to donors who wish to make a large cash donation. Gifts made to a Donor Advised Fund do not qualify for the increased deduction.

Required minimum distributions waived:

The CARES Act temporarily waives required minimum distributions from most qualified retirement plans, including IRAs, allowing time for these funds to recover from market fluctuations. Individuals age 70 ½ and older can continue to make tax-free gifts up to $100,000 annually from their eligible IRAs through qualified charitable distributions directly to RPCS.

Changes to corporate giving:

The CARES Act increased the cash contribution limit for corporations from 10% to 25% in 2020. Charitable contributions in excess of 25% may be deducted for up to five years under the usual limits.

For more information on how the CARES Act may affect your giving, please consult your financial advisor.