Tax Break for Charitable Donations in CARES Act

Written by: Archetype Wealth Content Team

Thanks to the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law in March, donors may give up to 100% of their Adjusted Gross Income (AGI) this year. Below are some of the key provisions from the CARES Act that may impact your charitable deductions this year.


Provisions in the Act incentivize the most generous donors by eliminating the percent of AGI limit for charitable deductions. Typically, donors can only deduct up to 50% of their AGI in any given year (60% for cash donations to qualified organizations). This AGI limit will be suspended for 2020, and it is now possible to deduct the full amount of your adjusted gross income this year. There are limits to the types of gifts that apply for this increased deduction, so please speak with an advisor as you decide whether to adjust your giving this year.


Additionally, individuals may take a $300 above-the-line charitable income tax deduction for donations made in 2020. This deduction may be taken in addition to the standard deduction, which is currently $12,400 for individuals and $24,800 for married couples filing jointly. 


In order to further aid charitable organizations, the CARES Act also incentivizes corporations by raising the cap on deductible charitable contributions from 10% to 25% of taxable income.


We have made it a mission at Archetype to help families thrive across generations by connecting their money with their purpose. Part of accomplishing that mission is helping you maximize the impact your wealth can have through generosity. We would love to serve you by increasing your capacity to give.






Archetype exists to help families thrive across generations by connecting their money with their purpose.


Disclaimer: Our intent in providing this material is purely for informational purposes, as of the date hereof, and may be subject to change without notice. This article does not intend to constitute accounting, legal, tax, or other professional advice. Visitors and readers should not act upon the content or information found here without first seeking appropriate advice from a trusted accountant, financial planner, lawyer or other professional.

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