Discover the Difference: Charitable Giving Made Easier Through the CARES Act
by Diocese of Des Moines | April 22, 2020
Charitable giving may have just gotten easier thanks to the Coronavirus Aid, Relief, and Economic Security (CARES) Act which established changes that support charitable giving for both taxpayers who claim itemized deductions, as well as those who do not.
Before the CARES Act, charitable contributions typically benefited those who itemized their deductions. The CARES Act creates a new above-the-line deduction (universal or non-itemizer deduction that applies to all taxpayers) for total charitable contributions of up to $300. Simply put, anyone who makes a gift of up to a $300 to support a qualified charity will be able to claim a deduction. The incentive applies to cash contributions made in 2020 and can be claimed on tax forms next year.
The law also lifts the existing cap on annual contributions for those who itemize their deductions. Now, deductions of qualified cash contributions are permitted up to 100 percent of the taxpayer's adjusted gross income. For corporations, the law raises the annual limit from 10 percent to 25 percent. Food donations from corporations would be available to 25 percent, up from the current 15 percent cap.
These new charitable giving incentives only apply to cash donations, not donations of stock, real estate or other non-cash types of property (except for corporate food donations). In addition, the contributions must be to pubic charities – not private foundations or donor advised funds.
"The word unprecedented has been used so many times, but this indeed is a time like no other for all of us. We are seeing so many in need and that need continues to grow," said Sue McEntee, Director, Catholic Foundation of Iowa. "While many have had to conserve their cash, others have found that social distancing and the inability to eat out or shop in stores, has led to a bit more cash that could be used to help others. Regardless of the size of your gift, I would encourage anyone who may find they can free up resources, to consider a charitable gift to support those who are less fortunate."
We invite all members of the Diocese of Des Moines to prayerfully consider a gift to your Catholic parish, school, or other non-profit organization. Thank you for your continued generosity and support!
If you have questions about charitable giving in the Diocese of Des Moines, call 515-243-7653 or visit our website. For additional information on how the CARES Act may impact your 2020 taxes, contact your accountant.