Charitable Giving - New Rules

The CARES Act has enacted several temporary provisions to improve the income tax benefits of charitable giving.

The provision with the widest impact allows taxpayers to deduct up to $300 ($600 in the case of a joint return) in qualified contributions from adjusted gross income, regardless if the taxpayer elects the standard deduction or not.  This provision is effective for 2020 and 2021.

It should also be noted that the Tax Cuts and Jobs Act has increased the limit for charitable deductions to 60% of the donor’s charitable contribution base through Jan 1st, 2026 for cash contributions to public charities. This limit is temporarily further increased to 100% of adjusted income for 2020, giving philanthropic taxpayers significant flexibility to capture income tax benefits for their giving.

Lastly, the CARES Act has increased the general C corporation deduction limit as well as the C corporation food inventory donation limit to 25% of a corporation’s taxable income for 2020.