The CARES Act applies a temporary universal charitable deduction for all taxpayers of up to $300. To qualify for this new deduction, the donations have to be in cash, and they have to be donated directly to charities. Ninety-two percent of taxpayers take a standard deduction rather than itemizing their charitable giving—under the new provision, taxpayers who do not itemize can now directly benefit from their charitable cash donations. 1 Law Before the CARES Act The deduction for charitable contributions is one of several tax benefits for charitable giving and tax exempt organizations. Contributions of non-cash property do not qualify for the special rules. The prior law allowed the deduction of cash contributions to charitable organizations up to 10% of taxable income. The simplest case is that you can take an income tax deduction in 2020 for cash contributions of up to 100% of your AGI directly to charity. Stanford’s Office of Planned Giving previously summarized the key provisions in the CARES Act related to charitable contributions made in 2020. The CARES Act passed earlier this year created a new above-the-line charitable contributions deduction for the 88% of all taxpayers who don’t itemize deductions. Taxpayers may still claim non-cash contributions as a deduction, subject to the general limits. The Cares Act increases this limit to 25 percent for cash contributions made to public charities. Deductions under the CARES Act must be in cash (including checks and credit card payments) and given to a 501(c)(3) public charity. Donating household items to Goodwill doesn’t count. An additional rule under the CARES Act, for 2020 and 2021, individuals who do not itemize are allowed a deduction for up to $300 of cash charitable contributions. Like individuals, any excess can be carried forward for five years. Individuals may take a charitable deduction if they itemize deductions. As a result of the most recent stimulus package, the Consolidated Appropriations Act, 2021, a couple of these provisions were extended (or increased, in one provision) into 2021 as described below. 115-97), the limit for Prior to the 2017 tax revision, popularly known as the Tax Cuts and Jobs Act (TCJA; P.L. However, unlike the 60% of AGI limit under prior law, the 100% of AGI limit takes into account gifts of property subject to the 20%, 30% and 50% limitations. Prior to the act, a C corporation’s charitable contribution deduction generally was limited to 10% of its taxable income. ... 30 Under 30 2021. This again comes in the form of an increased deduction limit. Qualified Charitable Contributions are defined as cash gifts to charitable organizations other than private foundations, supporting organizations and donor-advised funds. Charitable Deduction Incentives for C-Corporations. 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