Alert re CARES ACT Charitable Giving Incentives for Nonprofit Donors

(Updated March 30, 2020)

The Coronavirus Aid, Relief, and Economic Security Act (CARES ACT) was enacted into law on March 27, 2020. It provides assistance to businesses, nonprofits and individuals in meeting the economic challenges they face right now from the Covid-19/Corona Virus Pandemic. Below is a summary of a provision in the CARES ACT designed to incentivize donations to 501(c)(3) nonprofits.

New Above the Line Deduction

• The CARES ACT provides for an above-the-line deduction available to all taxpayers for total charitable contributions of up to $300 in contributions made in 2020.

Caps on Contributions Raised for Those Who Itemize and for Corporations

• The CARES ACT raises the current cap on annual contributions to 501(c)(3) nonprofits, for those who itemize, from 60 percent of adjusted gross income to 100 percent.
• The CARES ACT raises the current cap on corporate donations from 10 percent to 25 percent and raises the cap on food donations from corporations from 15 percent to 25 percent.

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