CARES Act tax incentives for charitable giving

In response to COVID-19, the CARES Act was signed into law in March 2020. In addition to providing much needed immediate economic relief, this legislation also provides tax incentives for charitable giving. So you might be able to save money by helping FRLT.

Here’s how it works

A new tax deduction is available

Every taxpayer who doesn’t itemize can deduct up to $300 ($600 for married couples) from their adjusted gross income (AGI) for donations made to qualified nonprofits like FRLT. In other words, you can deduct your gift from your gross income, reducing your taxable income.

Do you itemize deductions?

The adjusted gross income (AGI) limit for cash contributions was increased for individual donors. This means that for cash donations made to nonprofit organizations in 2020, you can now deduct up to 100% of your AGI (increased from 60%).

Interested in donating through your IRA?

In normal years, individuals over 70 ½ years old who make Qualified Charitable Distributions (QCDs) can donate up to $100,000 in IRA assets directly to qualified nonprofits each year, without having to take the distribution as income and pay taxes on it. This option is still available to anyone over 70 ½ years.

However, because the CARES Act allows everyone who itemizes to deduct 100% of their adjusted gross income (AGI) for cash donations to qualified organizations, individuals over 59 ½ years old can effectively take advantage of a QCD by taking a cash distribution from their IRA, donating it to charity, and offsetting their taxes by deducting up to 100% of their AGI.

For more info, contact: Corey Pargee, Development Director, at cpargee@frlt.org or (530) 283-5758 x2.