Benefits for Donors from the Federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (S. 748) was signed into law. The CARES Act is intended to provide significant financial relief to individuals and small businesses, especially those businesses in certain sectors of the U.S. economy that have been hit hardest by the COVID-19 pandemic, by providing $2 trillion in stimulus to the U.S. economy. A significant portion of the CARES Act focuses on supporting American workers, families and businesses through a combination of provisions, including expanded charitable contribution limits.

As Nonprofit Quarterly details, the stimulus bill contains an above-the-line deduction for total charitable contributions of up to $300 to 501(c)(3) nonprofit organizations like REEF. All taxpayers would be eligible to take the deduction, even people who use the standard deduction. The incentive applies to contributions made in 2020 and would be claimed on tax forms next year. The new deduction would not apply to non-cash gifts or to gifts contributed to donor advised funds.

For the eight percent of individual taxpayers who itemize their deductions, the bill would suspend for 2020 the normal limit on deductions for contributions, ordinarily 50 percent of adjusted gross income (AGI) or 60 percent for cash. For corporations, the limit on deductions for contributions, ordinarily 10 percent of AGI, is elevated to 25 percent for 2020.

For complete information see Section 2204 of the CARES Act or consult your tax advisor.