Charitable Giving Changes in 2020
New Deduction Available
The new CARES Act allows for a new charitable deduction for taxpayers who take the standard deduction (i.e., those who don’t itemize their deductions). This new deduction of up to $300 per taxpayer ($600 for a married couple) in annual charitable contributions is an “above the line” adjustment to income that will reduce a donor’s adjusted gross income (AGI), and thereby reduce taxable income. Donations made since January 1st count toward the $300 cap. Contributions must be cash donation(s) to qualified charities. Donations to donor advised funds (DAF) do not qualify.
New Charitable Deduction Limits
Individual donors who can give generously, regardless of their income, may be interested in a tax code change for 2020 that removes any limit to the deductions you can take for charitable contributions if you itemize (list out) your contributions. Previously, you could deduct up to a maximum of 60% of your adjusted gross income (AGI) via charitable contributions. Under the new guidelines, 100% of your donation is now tax deductible. This means that if your taxable income is $250,000 in 2020, and you give away $250,000 to qualified nonprofits in 2020, you won’t have to pay taxes on your income.
As a charitable organization, Shelburne Farms relies on gifts and grants from more than 4,000 individual donors and foundations each year. The COVID-19 crisis is making our work — educating for a sustainable future — more critical than ever, yet presenting Shelburne Farms with one of the greatest financial challenges it has ever faced. Please consider supporting the Farm by becoming a member or contributing to our Emergency Resiliency Fund. Thank you.
2020 Charitable Giving Resources:
- Coronavirus Stimulus Package FAQ: Checks, Unemployment, Layoffs and More (New York Times)
- The CARES Act (H.R.748)
This information is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor.