CARES Act Increases Deductions for Charitable Contributions

For those who don’t itemize their taxes…
The CARES Act allows for up to $300 in charitable contributions as an above-the-line deduction, meaning you don’t have to itemize to claim the deduction. Contributions must be cash donation(s) to qualified charities.

For those who do itemize…
The bill increases the cap on annual giving from 60 percent of adjusted gross income to 100 percent.

As part of the CARES Act, donors can deduct 100 percent of their gift against their 2020 adjusted gross income. If you have $1 million of income, you can give $1 million to a public charity and deduct the full amount in 2020. The new deduction is only for cash gifts that go to a public charity. If you give cash to, say, your private foundation, the old deduction rules apply. And while the organizations that manage donor advised funds are public charities, you do not get the higher deduction for donating cash to your donor advised fund. If your assets are substantial enough that you can give more than your income this year, you won’t lose the deduction for the excess amount. You can use it next year, as has always been the case.

For corporate charitable giving …
The CARES Act raises the annual limit from 10 percent to 25 percent of taxable income for corporations.

Questions about how this may impact your giving?
Please contact Amy Young – (406) 541-1652 or