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Changes to Charitable Giving Under the Cares Act

First and most important, we hope you and your family are staying healthy and have adapted to the new way of life while we are under stay-at-home instructions. It’s very likely you have heard of the actions the US government has been taking to stem the spread of the COVID-19 virus both as a health emergency and economically. While we are by no means experts in disease control, we are experts in helping our clients navigate uncertainty in financial markets and changes in law that impact their financial structures. The CARES Act is Congress’ response to the Coronavirus pandemic to relieve some of the pressure brought on by slowing economic activity. This particular blog will focus on some of the changes to charitable giving that have happened as a result of this law being enacted.

  1. The CARES Act allows contributions to public charities, not including donor advised funds, of cash to be deducted up to 100%of your adjusted gross income in 2020.The previous limitation was 60%.
  2. There is no increase to the limit for donations of securities.
  3. The CARES Act temporarily increases C Corporation deductions up to 25% of taxable income while the previous limit was 10%.
  4. There is an additional $300 deduction for charitable contributions available for each taxpayer who takes the standard deduction.For married taxpayers the deduction is $600.

Please note that the tax implications of your charitable contributions should be discussed with your tax advisor, as they will be able to give the best guidance specific to your circumstances. If you are interested in learning how to more effectively coordinate these changes with your wealth strategies, please don’t hesitate to contact one of our expert advisors.