The CARES Act and Charitable Giving

This March, Congress passed the CARES Act – the Coronavirus Aid, Relief, and Economic Security Act. While this $2.2 trillion stimulus package includes a wide range of measures, what you may not realize is that it makes now a better time than ever to give back to charity.

Here are some ways the CARES Act can help you give generously in support of organizations doing important work in your community:

Temporary Universal Charitable Deduction

For those taxpayers who do not itemize their charitable giving – the vast majority of U.S. taxpayers – you can take a one-time charitable gift deduction of up to $300 on your 2020 federal tax return. For those married and filing jointly, the limit is $600. This is an “above-the-line” adjustment that will bring down your taxable income. Note that this applies to gifts made to charitable organizations, but not to donor-advised funds or private foundations.

Change in Charitable Giving Deduction Cap

If you do itemize your charitable giving, you’re typically limited to a charitable deduction of 60% or less of your adjusted gross income. The good news in the CARES Act for those donors is that this cap has been raised for 2020. Individuals and joint filers will see this cap raised to 100%. And for corporations – for whom this cap is typically at 10% -- the cap for 2020 has been raised to 25%.

The COVID-19 crisis has impacted all of us in profound ways. Among those effects, the nonprofits in our communities, like Habitat, struggle all that much harder to carry out our work with more limited resources, while we serve some of those hardest hit by this crisis. If it is in your power to give at this time, you can see greater tax benefits and know that your impact is deeply felt. To help Habitat build through this crisis and beyond – and take advantage of the donor benefits in the CARES Act – give today to our COVID Resiliency Fund.