CARES Act Provides Donor Incentives
March 31, 2020The Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law on March 27, 2020, provides benefits for nonprofits and donors.
Of interest to donors, the bill provides donors with charitable giving incentives including a universal charitable deduction which will allow all taxpayers, even those who do not currently itemize their deductions, to claim a charitable deduction for cash donations up to $300 through December 31. Donations to donor advised funds and supporting organizations are not eligible for this deduction.
The stimulus package has an adjusted gross income limitation as well. Adjusted gross income limits on charitable deductions are suspended or adjusted for cash gifts made by individuals and corporations. The adjusted gross income cap for individual taxpayers has been suspended, which increases the cap from 60 percent to 100 percent of adjusted gross income. The cap for corporations has been increased from 10 percent to 25 percent. For food donations, the corporate cap has been increased from 15 percent to 25 percent.
The CARES Act also temporarily suspends required minimum distributions (RMD) for the 2020 tax year.
The CARES Act is 850 pages of information. Visit with your advisor or accountant on ways this legislation may impact you.
