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30 NOVEMBER 2020

CARES Act Changes for Charitable Deductions

2020 IRS Tax Law Changes Help Nonprofits, Allow for Additional New Personal Deductions

Thinking of making a donation to your favorite charity or nonprofit organization before the end of the year? This year there’s even more of a reason, thanks to new changes in federal tax code. To help American workers and businesses mitigate the devastating economic effects of the coronavirus outbreak, the government signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act in March of this year.

Included in the CARES Act are provisions that encourage individuals and corporations to help nonprofit organizations providing direct services and support to those impacted by COVID-19 in 2020.

The most important change is a $300 deduction that is now available to those who claim the standard deduction. Due to tax code changes in 2017, as many as 85 percent of Americans no longer itemize their tax returns, making them ineligible for charitable deductions. That is no longer the case. A universal “above the line”  deduction is now available for individuals who plan to take the standard deduction for their 2020 tax returns, for cash donations to qualifying nonprofit organizations.

Other changes include:

  • Percentage Limitation Eliminated for Cash Gifts Made in 2020:  For those who itemize, the CARES Act increases the existing cap on annual giving from 60 percent of AGI to 100 percent.
  • Increase in Limitation for Contributions by Corporations:  For corporate charitable giving, the CARES Act raises the annual limit from 10 percent to 25 percent of taxable income.
  • Increase in Limitation for Gift of Food Inventory:  The cap on deductibility of food donations from corporations would increase to 25 percent of taxable income, up from the current 15 percent cap.

Your $300 can have a huge impact on the lives of others-



*For questions on new changes in tax laws, talk to your tax professional or visit the IRS website.

Last Updated on December 1, 2020


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