What the CARES Act Means for Nonprofits

Charitable Giving Incentives for Donors to 501(c)(3) Nonprofit Organizations

In addition to facilitating direct financial relief to affected nonprofit organizations, the CARES Act also creates charitable giving incentives for donors to 501(c)(3) nonprofit organizations. Section 2204 of the CARES Act includes a new above-the-line deduction (universal or non-itemized deduction that applies to all taxpayers) for total charitable contributions of up to $300. The incentive applies to contributions made in 2020 and would be claimed on tax forms next year.

Section 2205 of the CARES Act lifts the existing cap on annual contributions for those who itemize, raising it from 60 percent of adjusted gross income to 100 percent. For corporations, the legislation raises the annual limit from 10 percent to 25 percent. Food donations from corporations would be available to 25 percent, up from the current 15 percent cap.

Excerpted from Venable LLP.

 

Good Shepherd Housing and Family Services does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.