Enhanced Charitable Deductions for Individuals and Corporations
The CARES Act (the stimulus bill recently passed by Congress to address the economic effects ofCOVID-19) includes provisions for individuals and corporations that may benefit organizations exempt under IRC Section 501(c)(3). The following information may be beneficial to those organizations:
· A one-time above-the-line deduction (available to taxpayers who do not itemize deductions) for cash contributions of up to $300 made to charitable or religious organizations in calendar year 2020.
· Increases the limit on the charitable contribution deduction made by individuals who itemize deductions for tax purposes. The current limit for an individual’s tax deduction for charitable contributions of cash (60% of adjusted gross income) is increased to 100% of adjusted gross income for 2020.
· For corporations, the limit on charitable deductions for cash contributions in 2020 is increased from 10% to 25% of pretax income. Additionally, the CARES Act increases the limitation on deductions for food donations by corporations in 2020 from 15% to 25% of pretax income.
For more information about benefits to donors, please go to https://www.councilofnonprofits.org/trends-policy-issues/initial-analysis-of-the-coronavirus-aid-relief-and-economic-security-act-cares.