Summary of the CARES Act Charitable Giving Provisions
Possible Benefits for TeachBeyond Ministry Partners
There are generous provisions in the CARES Act to promote increased charitable giving in 2020. The CARES (Coronavirus Aid, Relief and Economic Security) Act, which came into effect on March 27, 2020, was intended to help provide financial stability and relief for individuals and businesses affected by COVID-19. Below is information from the CARES Act that pertains to charitable giving which may affect your giving choices over the balance of 2020. We hope this summary will be helpful to you.
Please remember: TeachBeyond and its employees do not provide tax or legal advice. Please consult an attorney or qualified tax professional for this kind of advice.
Changes related to Charitable Giving in 2020 only
- Above-the-line deduction up to $300 for cash contributions to charities. This provision is helpful for individual taxpayers who do not itemize. For 2020 only, donors who do not itemize are eligible to claim up to $300 charitable giving above the standard deduction. To qualify, contributions must be made directly to TeachBeyond or another qualified charity using a personal check or online giving options. Giving through stock, annuities and donor-advised funds do not qualify for this exemption.
- Required Minimum (RMD) in 2020 waived for most retirees. RMD from traditional IRAs, defined benefit pension plans and 457 plans for individuals over 72 are suspended until 2021. Those age 70 ½ or older may still make a Qualified Charitable Distribution directly to a charity in 2020. As in 2019, up to $100,000 may be distributed by the IRA to a qualified charity in 2020 without federal tax and without increasing income of the IRA holder for federal income tax purposes. Please consult a tax specialist to see what is best for you.
- Cash gifts are now deductible up to 100% of Adjusted Gross Income (AGI) for individuals. For individuals and married couples who itemize their deductions for charitable giving, the 60% of AGI limit has been increased to 100% for cash gifts in 2020 to qualified charities such as TeachBeyond. Please consult a tax consultant if you think this would be helpful for you.
- AGI limitations for corporations changed for 2020. For corporations, the usual 10-percent of AGI limitation for charitable contributions of cash to qualified charities is increased to 25 percent under the CARES Act. This increased giving limit could provide a significant federal tax benefit to corporations.
For more information on any of the above incentives, please consult an attorney or qualified tax advisor.