The CARES Act and Giving

The CARES Act, Charitable Giving and You

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted March 27, is designed to help taxpayers, businesses and nonprofits facing economic hardship in the wake of the coronavirus pandemic and economic downturn.

There are several key provisions of the new law that may interest you:

Universal Charitable Deduction for Cash Gifts

Individuals will be able to deduct $300 above-the-line. This universal charitable deduction will enable a taxpayer who takes the standard deduction to also benefit from his or her charitable gifts made in 2020. This deduction applies only to cash gifts to qualified charities (not donor-advised funds).

100% Charitable Deduction Limit 

The new law lifts the cap on annual contributions for those who itemize. The usual deduction limit for cash gifts to public charities is 60% of adjusted gross income (AGI). For 2020, cash gifts to public charities, excluding donor-advised funds and supporting organizations, are deductible up to 100% of AGI. The gift may be for any charitable purpose and is not limited to gifts for coronavirus relief.

Required Minimum Distribution Waiver

The required minimum distribution (RMD) is waived for IRA and other qualified retirement plan owners for the year 2020. Loyal donors may still wish to use IRA funds to make a qualified charitable distribution (QCD). The QCD is available up to $100,000 for individuals who are over age 70½.  

 As always, please consult your tax advisor or attorney for advice on your specific situation.

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