Creation of a temporary universal charitable contribution deduction
- Section 2204 of the CARES Act creates a universal deduction for charitable contributions of up to $300.1 This deduction will apply to all taxpayers who do not itemize (i.e. claim the standard deduction) and will enable them to deduct $300 worth of qualified charitable contributions from their adjusted growth income (AGI). Currently, this universal charitable contribution deduction is temporary and will only apply to contributions made in 2020.
Removal of charitable contribution limitation on cash gifts for individuals
- The CARES Act suspends the existing 60% AGI limitation for individual charitable contributions in 2020.2 With this new policy, individuals can now deduct donations up to 100% of their 2020 AGI. This change only applies to cash contributions and gifts to donor.