How the CARES Act affects your charitable donations

  • Updated
  • Posted in News

Thank you, as always, for supporting Animal Welfare Friends. You may have heard that Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, 2020. This Act included several provisions that may change your charitable donations this year. The changes include a new available deduction, new charitable deduction limits, and RMDs being waived in 2020 & 2021 for most donors. Please consider the following:

– You can now deduct your gift to AWF, even if you take the standard deduction. The CARES Act allows for up to $300 per taxpayer (or $600 for a married couple) in an above-the-line deduction for charitable gifts made in 2020 & 2021 and claimed on taxes in 2021 & 2022. This means that you can lower your income tax bill by giving to AWF today, even if you take the standard deduction on your taxes.

– If you itemize deductions, there are new charitable deduction limits. The CARES Act increases the existing cap on charitable cash contributions for those who itemize, raising it from 60% of adjusted gross income to 100% in 2020 & 2021.

– Were you planning to take a required minimum distribution (RMD) from your retirement account in 2020? The CARES Act waives all RMDs for individuals over the age of 70 ½ who own specified retirement accounts in 2020 & 2021. However, for account owners who began taking their RMDs prior to 2020, you can still choose to send a qualified charitable distribution to AWF and potentially decrease your tax burden.

AWF lacks the personnel to offer tax advice, so please consult a tax professional to determine what options work best for your unique situation.