CARES Act: Charitable Deduction Summary

hawkins@growyourgiving.org Corporate Charitable Giving, Individual & Family Giving, Professional Advisors

The CARES Act, signed into law on March 27, includes provisions that affect both individual and corporate donors. Specifically:

  • 60% of AGI Limit Suspended for 2020
    For the 2020 tax year, individuals can deduct any cash contributions made to qualified charitable organizations, up to 100% of their adjusted gross income (AGI). Deductions for cash donations were previously limited to 60% of the taxpayer’s AGI.
  • Corporations’ 10% Limit Increased to 25% for 2020
    For the 2020 tax year, corporations can deduct up to 25% of the taxpayer’s taxable income for any cash contributions made to qualified charitable organizations. Deductions for cash donations were previously limited to 10% of the taxpayer’s taxable income.
  • New $300 Deduction for Qualified Charitable Donations
    Individuals who take the standard deduction can claim an above-the-line tax deduction for cash donations to qualified charitable organizations, up to $300.

Deductions for Gifts to Regional Response Funds
Donations to the Kansas City Regional COVID-19 Response and Recovery Fund qualify for the additional deductions. You can also support the Fund with a qualified charitable distribution from your IRA, if you are age 70.5 or older.

Donor-Advised Funds Not Affected
Deduction limitations for charitable gifts to donor-advised funds, private non-operating foundations, and supporting organizations were not changed under the CARES Act.

We Can Help
Donors are grateful for their donor-advised funds now more than ever, as they are using their funds to give generously during this time of need. If you need help determining how to support local and national relief efforts related to the COVID-19 pandemic, don’t hesitate to call. Our charitable experts are available at 816.842.0944 or info@growyourgiving.org.

Authored by: Leanne Breiby, Director of Communications