Lower your 2020 taxes with a donation to Catholic Charities through the CARES Act
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020. In addition to significant economic relief for the U.S. economy, the law provides important provisions related to charitable giving. These provisions are effective for the 2020 tax year only.
CARES Act Overview
Universal charitable deduction for donors who do not itemize
Donors who do not itemize can deduct cash gifts to public charities of up to $300 per taxpayer or $600 per married couple. Cash gifts include those made by check, credit card, electronic funds transfer, or payroll deduction.
Increase in AGI limit for donors who itemize
Donors who itemize can deduct cash gifts to public charities of up to 100% of their adjusted gross income (AGI). While this deduction is reduced by other itemized deductions, any unused deduction can be carried over for up to five additional years.
Increase in limit on cash contributions from corporations
Corporations can give up to 25% of taxable income in 2020 for cash gifts to public charities. While other charitable contributions reduce this limit dollar-for-dollar, cash contributions more than the 25% limit can be carried over for up to five additional years.
Suspension of Required Minimum Distributions (RMD)
The CARES Act suspends RMD for 2020 from IRAs, 401(k)s, 403(b)s, and other defined benefit pension plans. This change helps retirees who would have had to take larger-than-expected distributions or face penalties.
As with all tax matters, donors should review their personal situations with their financial advisers and attorneys.