What is the

CARES Act?

In March of 2020, the U.S. Federal Government signed into law a $2 trillion relief act aimed at providing relief to individuals, businesses, and government organizations.

CAREs stands for The Coronavirus Aid, Relief, and Economic Security Act. 

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Key Takeaways for Giving

1.

Temporary universal charitable deductions

  • Taxpayers who do not itemize deductions can take a one-time deduction of up to $300 for gifts made to charitable organizations. The deduction is ONLY for gifts of cash made in the calendar year 2020 and does not cover other types of gifts or contributions made to donor-advised funds or private foundations.

2.

60% adjusted gross income limitation suspended for individuals' charitable contributions during the year of 2020

  • In a typical year, individuals can only take a charitable deduction of up to 60 percent of their adjusted gross income, no matter how much they give. For 2020, there is no limit, making cash contributions fully deductible.

3.

Cap increased on how much corporations may deduct for charitable gifts from 10% of taxable income to 25%

  • In addition, the limitation on deductions for food donations by corporations increases from 15 percent to 25 percent in 2020.

What does that mean for you?

People who make smaller gifts will be able to deduct them up to $300 - whether or not you itemize it. 

People who make larger gifts will be able to deduct a much higher amount. Individuals can make larger charitable gifts that eliminate their tax burdens. 

Corporations can now give up to 25% of taxable income, up from 10%.

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