The CARES Act
President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (known as the CARES Act) into law on March 27, 2020. The bill includes incentives to make charitable donations for both individuals and corporations.
Here’s what you need to know:
- Under Section 2204 of the Act, taxpayers who take the standard deduction on their 2020 tax return can claim up to $300 for charitable contributions made this year as a deduction from their gross (taxable) income.
- For individuals who itemize their deductions, Section 2205 of the CARES Act increases the limit on deductions for charitable contributions in 2020 from 60 to 100 percent.
- For corporations, Section 2205 of the Act increases the limit on deductions for charitable contributions in 2020 from 10 percent to 25 percent.
- Most donors will notice a greater tax advantage for giving now as compared with last year.
- Consult your tax advisor for how making a gift will affect your 2020 taxes.