CARES Act Tax Provisions

CARES Act: Coronavirus Aid, Relief, and Economic Security Act (March 2020)*

The Coronavirus Aid, Relief and Economic Security (CARES) Act to help combat the far-reaching impacts of COVID-19. The bill provides increased tax incentives for charitable giving for both individuals and corporations, signifying an intent to stimulate philanthropy throughout America.

*The Consolidated Appropriations Act, 2021, H.R. 133, passed by Congress on December 21 and signed into law by President Donald Trump on December 27, 2020, extends these tax provisions into 2021.

Here's how the following provisions may impact your charitable contributions in the 2020 tax year.

Itemized Deductions

Contributions to qualified charities are generally limited to a percentage of a taxpayer's adjusted gross income (AGI). The CARES Act temporarily suspends the 60% AGI limitation. For cash contributions made in 2020, you can now elect to deduct up to 100% of your AGI. Gifts to donor-advised funds are not eligible.

Corporate Giving

The AGI limit for cash contributions was also increased for corporate donors. Corporations can now deduct up to 25% of taxable income (increased from 10%).

For more information, visit "How the CARES Act changes deducting charitable contributions" at IRS.Gov.