On March 27, 2020, the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law to help combat the far-reaching impacts of COVID-19. The bill provides increased tax incentives for charitable giving for both individuals and corporations, including a Temporary Universal Charitable Deduction (a temporary, above-the-line deduction that allows non-itemizing taxpayers to deduct charitable gifts in 2020).
How the CARES Act impacts you… and Interface!
The CARES Act encourages more individuals and corporations to gift to non-profits providing direct care services and support to community members affected by the COVID-19 health and economic crisis.
Beginning with 2020 tax returns, the CARES Act allows for an additional “above-the-line” deduction for charitable gifts made in cash of up to $300. Individuals and corporations that do itemize can now deduct greater amounts of their contributions to charity. If you are not itemizing on your 2020 taxes, you can claim this new deduction.
The CARES Act includes this new law for one year and is intended to increase the number of taxpayers that contribute to charitable causes and non-profits, by offering the ability to access a charitable deduction previously not used by 85% of Americans.
In addition to the $300 deduction, individuals who itemize can now deduct donations up to 100% of their adjusted gross income for 2020, up from 60%, and corporations are now able to deduct up to 25% of taxable income, up from 10% previously.
To learn more about this charitable deduction, please consult with your tax advisor for further details.