Home > Publications > Impact of the CARES Act on Charitable Giving in 2020

If you itemize your deductons: You can now give more to Village of Hope and other charities before reaching your adjusted gross income (AGI) limitation. Formerly set at 60%, the limitation for cash contributions to certain public charities like VOH has now been raised to 100% of an individual’s AGI for 2020. Any giving beyond this 100% limitation may be carried over and used in the next five years.

If you don’t itemize your deductions: The CARES Act allows for up to $300 in charitable contributions to qualify as an above-the-line deduction, meaning you don’t have to itemize deductions to VOH in order to claim the $300 as a deduction. Qualifying donations must be made in cash or cash equivalents (as opposed to stock, for example).

Are you 70 ½ years or older? The CARES Act did not change the rules around the Qualified Charitable Distribution (QCD), which allows individuals over 70½ years old to donate up to $100,000 in IRA assets directly to Village of Hope or other public charities annually, without taking the distribution into taxable income.

Are you 59 ½ years or older? Since under the CARES Act an individual can elect to deduct 100 percent of their AGI for cash charitable contributions, it affords individuals over 59½ years old the benefits similar to a QCD. They can take a cash distribution from their IRA, contribute the cash to VOH or other charities, and may completely offset tax attributable to the distribution by taking a charitable deduction in an amount up to 100 percent of their AGI for the tax year.

Own a corporation? The CARES Act increased the available deductions on donations to VOH and certain other charities to 25% of taxable income which is up from the 10% limit which is generally application to corporations.

 

This information is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor.