Tax Deductible Gifts

What the CARES Act means for your charitable giving

On March 27, the President signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help combat the far-reaching impacts of COVID-19. The bill provides increased tax incentives for charitable giving for both individuals and corporations, signifying an intent to stimulate philanthropy throughout America. Notable incentives include: Deducting up to 100% of your Adjusted Gross Income, and IRA Qualified Charitable Distribution opportunities now available for individuals over 59½.

  • Itemizing: The adjusted gross income (AGI) limit for cash contributions was increased for individual donors. For cash contributions made in 2020, you can now elect to deduct up to 100 percent of your AGI (increased from 60 percent).

 

  • Not Itemizing: The CARES Act allows for an additional, “above-the-line” deduction for charitable gifts made in cash of up to $300. If you are not itemizing on your 2020 taxes, you can claim this new deduction.

 

  • IRA Qualified Charitable Distributions (QCD): Standard QCD rules apply, however, with CARES Act an individual can elect to deduct 100 percent of their AGI for cash charitable contributions. This effectively affords individuals over 59½ years old the benefits similar to a QCD; they can take a cash distribution from their IRA, contribute the cash to charity, and may completely offset tax attributable to the distribution by taking a charitable deduction in an amount up to 100 percent of their AGI for the tax year.

The tax information provided is general and educational in nature and should not be construed as legal or tax advice.

Family Tree Relief Nursery is a registered 501-c3 non-profit organization, Tax ID 14-1872327