How the CARES Act for COVID-19 Benefits Donors

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There are new incentives for donating to charity, based on the CARES ACT, the recently passed $2 trillion COVID-19 stimulus package.

Taxpayers who previously could not deduct their charitable contributions, because they took the standard deduction, can now deduct up to $300 of qualified charitable contributions on their 2020 tax return.

Now is a good time to give, if you can, not only because of these new tax benefits, but also because of the overwhelming community need. This health and financial crisis is impacting many in San Diego, who are struggling to cover basic needs.

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Here is the tax benefit break down for those taking standard deductions, itemized deductions and corporate giving:

Standard Deduction

For people who take the standard deduction, the CARES ACT allows you to take a tax deduction for contributions made to qualified charitable entities up to $300 per year starting in 2020 – this deduction is “above-the-line.” The 2020 Standard deduction is $12,400 for individuals and $24,800 for married couples filing jointly. Therefore, any donation to qualifying charities of up to $300 will be added to the standard rate of deduction. This deduction applies for 2020 and beyond.

Itemized Deduction

For people who file for itemized deductions, the CARES ACT allows you to take a tax deduction of up to 100% of your Adjusted Gross Income (AGI) for contributions to qualifying charities starting in 2020. The new law temporarily lifts the limits on charitable giving from 60% of a taxpayer’s AGI to 100% for 2020.

Corporate Donations

For corporate donors, the CARES ACT allows an entity to take a tax deduction of up to 25% of their Adjusted Tax Income for contributions to qualifying charities starting in 2020. The new law temporarily lifts the limits from 10% of adjusted taxable income to 25% for 2020.

Ready to help San Diego?

There are so many ways to positively impact the community right now:

This information is not intended to be tax or legal advice. Please consult a tax advisor or lawyer for advice. These numbers are for demonstrative purposes and are subject to change. Rules in individual states may also apply.

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