Potential Tax Benefits for Donors

How the Stimulus Legislation May Help Donors

The recently passed federal stimulus bill, the Coronavirus Aid, Relief and Economic Security (CARES) Act, includes provisions for charitable giving, including an “above the line” charitable deduction of up to $300, which will allow you to deduct charitable donations up to that amount, even if you don’t itemize.

Details are still emerging, but here’s some insight on the new law from Community Foundation Research and Training Institute President David Bennett:

About the new “above the line” charitable deduction: “The phrase ‘above the line’ means that a taxpayer can deduct charitable gifts up to $300 even if they don’t itemize their charitable deductions. This is important, because after the passage of tax reform in 2017, only about 10 percent of Americans itemize their taxes. The new law would allow them to deduct up to $300 from their taxable income. Importantly, what we have read so far indicates that those who itemize won’t get the $300 above the line charitable deduction.”

Bennett also says that gifts to donor advised funds won’t qualify for the $300 deduction. (A gift to CFA’s emergency relief fund would.)

About income limits for contributions: “In addition, for 2020, the income limit for cash contributions to charity rises to 100 percent of income (from the current 60 percent limit). As with current law, any cash gifts in excess of that limit can be carried forward to the next year. Also, cash gifts to donor advised funds do not qualify for the 100 percent income limitation.”

What does this mean for donors? You can help your community weather this storm and potentially realize helpful tax benefits. CLICK  HERE to learn more about CFA’s COVID-19 Rapid Response Fund, or CLICK HERE to make a simple, secure online donation today.

Thank you for showing your love for our community!

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