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2020 CARES Act and Charitable Contributions

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020. While the impact of the $2.2 trillion response bill is wide, summarized below are key provisions in the CARES Act related to charitable contributions.

$300 Above-the-Line Charitable Deduction

  • A new above-the-line charitable deduction of up to $300 is available to taxpayers who do not itemize deductions.
  • This deduction applies only to qualified cash contributions and does not apply to cash contributions made to donor advised funds or supporting organizations. It also does not apply to carry-over contributions.
  • Currently, it’s unclear whether this deduction will be allowed beyond 2020.

Charitable Contribution Limitation

  • For individual taxpayers who do itemize deductions, the CARES Act temporarily suspends the 60% charitable contribution deduction limitation for qualified cash contributions.
  • Individual taxpayers who contribute cash to a public charity, or a limited number of private foundations, may deduct up to 100% of their adjusted gross income after taking into account other contributions subject to charitable contribution limitations.
  • Individual taxpayers can continue to carry forward any excess charitable contributions for five years.
  • Corporations may deduct charitable gifts up to 25% of the corporation’s taxable income (increased from 10%).
  • This is only effective in 2020.

Waiver of Required Minimum Distributions

  • Required minimum distributions (RMDs) are waived for IRAs, including inherited IRAs, and other qualified retirement plans such as 401(k) and 403(b) plans.
  • RMDs are often considered in connection with gifts made to the Navy SEAL Foundation through a Qualified Charitable Distribution.
  • This is only effective in 2020.

For questions about making a donation to the Navy SEAL Foundation please contact development@navysealfoundation.org.

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