The Coronavirus, Aid, Relief, Support, and Economic Security (CARES) Act stimulus bill was signed into law by the president on March 27, 2020. The following giving incentives have been enhanced as a result of this bill:
The adjusted gross income (AGI) limit for cash contributions has been increased. You can now deduct up to 100% of your AGI (up from 60%) for 2020 cash contributions. This makes cash contributions fully tax-deductible.
The CARES Act allows for an additional, “above-the-line" deduction for charitable cash gifts of up to $300. You can claim this new deduction if you are not itemizing on your 2020 taxes.
To qualify for these charitable giving incentives, donations must be in the form of cash gifts. Donor-advised funds do not qualify for the 100% of AGI deduction limit.
There are no changes with the CARES Act to existing deductions for contributions made into a donor-advised fund. Individuals are still able to deduct up to 60% AGI in cash and up to 30% AGI in appreciated assets. Existing carry-over rules still apply. If your 2020 donations exceed your AGI deduction limits, you may carry forward excess deductions for up to five subsequent tax years.
The CARES Act did not change the rules around QCD, which still allows individuals over 70½ years old to donate up to $100,000 annually in IRA assets directly to charity and exclude the distribution from taxable income.
Please contact us at email@example.com if you have any questions about the CARES Act and how to take an advantage of it.