Tax Benefits of the CARES Act

 

The new CARES (Coronavirus Aid, Relief, and Economic Security) Act recognizes the vital role nonprofits, like Philabundance, play in providing critical assistance to their communities. The CARES Act relaxes some of the limitations on charitable income tax deductions for individuals and corporations, and provides nonprofits with access to capital.

The Law, Explained by a Charitable Planning Attorney

 

 

 

Tax Breaks for Givers

With donors needed now more than ever, the CARES Act aims to encourage charitable giving by revisiting tax incentives (Display). For individual donors, deductions on cash gifts had previously been limited to 60% of adjusted gross income (AGI). Now this limitation is suspended for this year, effectively raising deductions to 100% of income.

But only cash contributions to public charities are eligible for the higher limit; gifts to donor-advised funds, supporting organizations, and private foundations do not qualify. Taxpayers who don’t itemize their deductions also receive a benefit. Donors who use the standard deduction are permitted to deduct an additional $300 for cash contributions to public charities this year.

The exceptions aren’t just aimed at individual donors. For corporations, the deduction for charitable gifts is now increased from 10% to 25% of taxable income. The bill also increases deductions on food contributions from 15% to 25%.

 

Your Charitable Goals

We are deeply grateful for your continued kindness and support during this difficult time. Please contact Scott Fremont at sfremont@philabundance.org or 724-237-5813 to discuss how your gift can make an impact at Philabundance.
The information listed above is for your reference, and not intended as legal or tax advice. We encourage you to consult with your attorney or tax advisor to see how the CARES provisions may impact you.

 

*Information contained herein was accurate at the time of posting. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results.