CARES Act impact on charitable giving

The Coronavirus Aid, Relief, and Economic Security Act, known as the CARES act, was signed into law in March. Key elements affecting charitable giving opportunities are below.

$300 charitable deduction for everyone: Now all taxpayers will be able to deduct $300 of cash gifts to public charities, except donor-advised funds. This is the case even for taxpayers who do not itemize deductions on their returns.

RMDs suspended, but QCDs still available: Owners of individual retirement accounts (IRAs) will not be required to take a required minimum distribution (RMD) in 2020. However, this does not prevent IRA owners over age 70 1/2 from making qualified charitable distributions (QCDs).

Limitations on charitable deductions enlarged for cash gifts: Donors making large gifts and pledge payments can benefit from the ability to use more of their deduction in 2020, accelerating their tax savings. Cash gifts made in 2020 can be deducted for up to 100 percent of a donor’s adjusted gross income (as compared to the previous 60 percent). However, this change does not apply to gifts to donor-advised funds. Also, the limits for gifts of appreciated stock or real estate were not changed; they remain at 30 percent of adjusted gross income.