What are the Federal income tax deductions for charitable contributions included in the CARES Act?
The CARES Act makes a new charitable deduction available to individual taxpayers that do not itemize their deductions. This new benefit, also referred to as a universal deduction, allows for a charitable deduction of up to $300 per individual. This is an above-the-line contribution that is deducted from the individual taxpayer’s income prior to the calculation of their adjusted gross income. This is the one charitable giving benefit that will extend beyond the 2020 tax year.
In addition to the new universal deduction, for 2020, the Act provides incentives for both individuals and corporations by increasing the available deductions on qualified charitable contributions to:
- 100% of their adjusted gross income for individual taxpayers who itemize their deductions. Beyond the scope of the CARES Act, the deduction for qualified charitable contributions made by itemizing individual donors is limited to 60% of their adjusted gross income.
- 25% of taxable income for corporations. Up from the 10% limit which is generally applicable for corporations outside of the CARES Act.
To trigger these new benefits, both individual and corporate taxpayers have to make a qualified charitable contribution. The increased limits are applicable only to cash donations.
When you make charitable donations to Side by Side, you can claim tax deductions. Below is the information and other resources on how you can claim deductions.
Few things to know:
- Make sure that the group you want to donate is approved by the IRS in order to be qualified for tax-deductible donations. You can check online from IRS website here.
- Documents, including canceled check, bank record or a receipt with the charity's name and donation amount, is necessary for deduction.
- Charitable contributions cannot exceed 50 percent of your Adjusted Gross Income (AGI).
- You can only deduct charitable contributions if you itemize deductions on Form 1040.
Charitable Contribution Information (IRS)
Charitable Contribution Information (TurboTax)
Charitable Contribution Information (HR Block)