Does the CARES Act Change 2020 Charitable Giving?

The answer is, “Yes”! You may know the Coronavirus Aid, Relief, and Economic Security (CARES) Act as an economic stimulus package—and it certainly is that—but did you also know that it opened the door for increased charitable giving?

While this legislation was aimed at providing financial relief in the form of tax rebates and credits, unemployment benefits, business loans and more, it also provided new opportunities for charitable giving among those with the ability to give.

Here’s a glimpse at how the CARES Act impacts individual and corporate giving for all of 2020 (and potentially longer).

• Limits suspended for individual charitable contributions. Before March 27 (when the CARES Act was signed into law), there was a limit to the amount of charitable cash contributions an individual could make in a year. That is, there was a limit to what they could include as an itemized charitable deduction on their taxes, and that limit was 60 percent of their adjusted gross income (AGI). Now, individuals can deduct cash contributions to public charities for up to 100 percent of their AGI.

• Increased limit for corporate charitable deductions. Similar to what is being offered to individual charitable gifts, corporations are also able to deduct a greater portion of their income. For corporations, the limit had been 10 percent of their taxable income; that ceiling has now been raised to 25 percent of the taxable income.

• New deduction available for individuals. For individual taxpayers who take the standard deduction, which means they do not itemize their deductions, they can now claim a one-time tax deduction for cash donations of up to $300 ($600 for married couples) made to a public charity.

For individuals and corporations, these provisions give them the ability to lower their 2020 taxable income while supporting the charity groups they already believe in and love. Looking for more details about how the CARES Act impacts charitable giving? Check out this piece from AFP or contact your trusted financial advisor.

Here at Recovery on Water, where we provide daily support and fitness opportunities for women diagnosed with breast cancer, our mission remains critical. While we have closed down our indoor spaces and suspended all in-person programming, we are continuing to deliver virtual programming and social engagement, and we are grateful to all who are helping to make this work possible—both our current donors and those who will capitalize on new opportunities for giving thanks to the CARES Act.

Learn more about our response to COVID-19 restrictions and our new virtual programs here!