Charitable Giving in 2020

In response to the nation’s health crisis, the Coronavirus Aid Relief and Economic Security Act—or CARES Act—became law in March of 2020. While most of the act focuses on relief to individuals and businesses, there are key provisions that impact charitable giving. Below is a brief summary.

Non-itemizers eligible for $300 tax deduction:
A reduction in taxable income is now available for individuals who take the standard deduction rather than itemize their deductions. This inclusion creates a new above-the-line charitable deduction for cash contributions of up to $300 ($600 for a married couple).

Cap on deductions lifted:
For 2020 only, individuals who itemize may deduct annual contributions up to 100% of their adjusted gross income for cash gifts made to nonprofits. This adjustment may be attractive to those who would like to consider increasing their annual donation. 

Required minimum distributions waived:
The CARES Act temporarily waives required minimum distributions from most qualified retirement plans, including IRAs, allowing time for these funds to recover from market fluctuations. Individuals age 70 ½ and older can continue to make tax-free gifts up to $100,000 annually from their eligible IRAs through qualified charitable distributions directly to Alternatives, Inc.

Changes to corporate giving:
The CARES Act increased the cash contribution limit for corporations from 10% to 25% in 2020. Charitable contributions in excess of 25% may be deducted for up to five years under the usual limits. 

If you are interested in exploring new methods of giving to Alternatives, Inc. during this unprecedented time, please consult your financial advisor. Contact Anita Feiner, Director of Development at afeiner@alternativesinc.org if you have additional questions or if we can help you with gift-planning opportunities.