Congress recently passed the “Coronavirus Aid, Relief, and Economic Security Act," also known as the CARES Act, in response to the current challenges faced by our nation. Among the many provisions of the act are two benefitting donors to nonprofit charitable organizations.
First, the CARES Act allows taxpayers who do not itemize to deduct up to $300 in charitable donations from their taxable income – in addition to their standard deduction. The rule will apply only to charitable contributions made in 2020. Taxpayers will be able to claim the deductions on their tax forms next year. This deduction can be used for contributions of cash (not stock) to qualified charitable organizations.
Second, the CARES Act lifts the limitations on charitable contributions by taxpayers who do itemize, from the previous limit of 60% of Adjusted Gross Income (AGI) to 100% of AGI in 2020. This could allow significantly larger deductions for gifts to nonprofit organizations this year. Also, any contributions in excess of total AGI may be carried forward for up to five additional years. (The provision also temporarily lifts the cap on a corporation’s charitable deductions from 10% to 25% of taxable income.)
These are difficult times. Eastern State Penitentiary Historic Site is grateful to all our friends who give generously to help us preserve this site and advance our mission. If circumstances permit you to support Eastern State this year, we wanted you to know how doing so may benefit your tax situation. Your online gift to Eastern State will help us weather our temporary closure, maintain our new online programming, and prepare to reopen again as soon as we can do so safely.
Please consult your tax advisor to determine how these provisions may impact your particular circumstances.