The passage of the Coronavirus Aid, Relief and Economic Stability Act (CARES Act) contains many provisions intended to bring relief to those affected by the crisis, including individuals, hospitals and public health, state and local governments, small businesses, large corporations, and education. Recognizing the critical role that non-profits and educational institutions play in the overall recovery effort, the new law also includes enhanced charitable giving incentives for both individuals who itemize their deduction and those who do not.
The law includes an “above-the-line” deduction for non-itemizing taxpayers, even if they take the standard deduction, to deduct cash contributions of up to $300 made in 2020.
For taxpayers who do itemize their deductions, the law temporary lifts the existing cap on annual contributions, raising it from 60% of adjusted gross income to 100%.
For corporations, it raises the annual limit from 10% to 25%.
These incentives apply for cash gifts going to a qualified private, not-for-profit institutions and not to donor advised funds or supporting organizations.
