The Coronavirus Aid, Recovery, and Economic Security (CARES) Act

The Coronavirus Aid, Recovery, and Economic Security (CARES) Act was passed by Congress and signed into law on March 27, 2020. Provisions within this legislation may be beneficial to those who make charitable contributions to organizations such as Lawrence General Hospital. The bill provides increased tax incentives for charitable giving for both individuals and corporations.

How the 2020 CARES Act May Affect Charitable Contributions

Itemizing Deductions? 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)*.

Corporate Giving? The AGI limit for cash contributions was also increased for corporate donors. Corporations can now deduct up to 25 percent of taxable income (increased from 10 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.  Please be aware that there is a $300 limit per “tax-filing unit” – the $300 limit applies to both individuals and couples (couples cannot deduct $600)*.

IRA Qualified Charitable Distributions (QCD)? The CARES Act did not change the rules around the QCD, which allows individuals over 70½ years old to donate up to $100,000 in IRA assets directly to charity annually, without taking the distribution into taxable income*.
 
Please note that this provision is currently temporary and has been extended for 2021.

*The tax information provided above should not be construed as legal or tax advice. Please consult your Attorney or tax advisor regarding your specific tax situation.