CARES Act Changes Charitable Contribution Deductions for 2020

Posted on November 27, 2020
Posted in Blog, Community Outreach/Education

Here’s how the CARES Act changes deducting charitable contributions made in 2020:

Previously, charitable contributions could only be deducted if taxpayers itemized their deductions.

However, taxpayers who don’t itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. For the purposes of this deduction, qualifying organizations are those that are religious, charitable, educational, scientific or literary in purpose. The law changed in this area due to the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The CARES Act also temporarily suspends limits on charitable contributions and temporarily increases limits on contributions of food inventory. More information about these changes is available on IRS.gov.

The main takeaway:

  • The CARES Act established a new above-the-line deduction for charitable giving.
  • You can write off up to $300 in cash donations on your 2020 income tax return.
  • Normally, you’d have to itemize deductions to write off charitable giving when you file your taxes.

The CARES Act, which went into effect this spring, allows people who take the standard deduction — which is $12,400 for single filers and $24,800 for married-filing-jointly in 2020 — to claim a deduction of up to $300 in donations. You’d claim this tax break when you file your 2020 return this coming spring.

“The only caveat is that the donation must be made directly to charity and it has to be in cash,” rather than stocks or other assets, said Mark Alaimo, CPA and member of the American Institute of CPAs’ personal financial specialist committee. You can also use a credit card or a check to make your donation.

So now you know – it’s time to Give and Get Back! Become a Suncoast Humane Society #MemberOfThePack and consider giving a Holiday gift, or joining our monthly Sustainer Circle program to continue helping homeless animals on a daily basis.

 

** This information is not meant to be taken as tax advice. Please consult the IRS website or tax specialists for more details about this tax deduction.

References:
https://www.irs.gov/newsroom/how-the-cares-act-changes-deducting-charitable-contributions
https://www.cnbc.com/2020/11/23/cares-act-added-a-300-charitable-contribution-deduction-heres-how-it-works.html


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