How new charitable tax rules impact you
Beginning with 2020 tax returns, taxpayers will be able to claim up to $300 in cash contributions to charity as a
deduction without itemizing and individuals and corporations that do itemize can now deduct greater amounts of their
contributions to charity.
This new law, which was included in the CARES Act and is currently in place for one year, is intended to spur
charitable giving by offering all taxpayers the ability to access a charitable deduction.
Previously, as many as 85 percent of Americans did not itemize their tax returns, making them ineligible for
charitable deductions. Now that opportunity has changed.
The goal with the new $300 deduction is to encourage more individuals to help the nonprofit organizations providing
direct services and support to those impacted by the COVID-19 health and economic crisis.
In addition to the $300 deduction, individuals and corporations that do itemize each year can now deduct greater
amounts of their contributions to charity. Up from 60% previously, individuals can now deduct donations up to 100%
of their adjusted gross income for 2020. Corporations are now able to deduct up to 25% of taxable income, up from
Here’s what you need to know about the nuance of the law
Who is eligible?
Taxpayers who do not itemize their deductions are eligible to claim the new $300 deduction. For couples who file
jointly, the CARES Act now allows you to take a $600 charitable deduction.
What assets can be donated?
Only cash gifts are eligible for the $300 deduction, meaning appreciated assets or real estate are not included.
What if I haven’t filed my 2019 taxes?
If you have yet to file your 2019 taxes, it’s important to note that this deduction does not apply to your 2019
filing. Currently, the new limits and deductions in the CARES Act only apply to 2020 filings.