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Do You Qualify for a $300 Tax Deduction Under the CARES Act?

With the 2020 CARES act for Coronavirus Aid, Relief and Economic Security (CARES) Act, there are several potential enhanced tax advantages to giving to your local Douglas County nonprofit. With Colorado Gives Day (Colorado's largest annual single day of online giving) just around the corner on December 8, now is a good time to think about how you can give back to your community during this season of giving.

Be sure to talk to your financial planner or tax advisor about what's right for you.

New deduction available to non-itemizers: This deduction allows for up to $300 per taxpayer ($600 for a  married couple) in annual charitable contributions. It is available only to people who take the standard deduction (for taxpayers who do not itemize their deductions) on their tax return. It is an "above the line" adjustment to income that will reduce a donor's adjusted gross income (AGI), and thereby reduce taxable income. A donation to a donor advised fund (DAF) does not qualify for this new deduction.

New charitable deduction limits for itemizers: As part of the CARES bill, individuals and corporations that itemize can deduct much greater amounts of their contributions that go to a public charity. Individuals can elect to deduct up to 100% of their 2020 AGI (up from 60%). Corporations may deduct up to 25% of taxable income, up from the previous limit of 10%. The old deduction rules apply to gifts to private foundations. The higher deduction does not apply to donations directly given to a DAF.

Required Minimum Distributions (RMDs) waived in most donors: RMDs that would have begun 2020 do not have to start until 2021, including distributions from defined pension plans and 457 plans. This change may weaken the incentive for a donor to make a Qualified Charitable Distribution (QCD) from their IRA in 2020, however, a QCD made this year will still allow both itemizers and non-itemizers to direct up to $100,000 from their IRA to charities in a tax efficient manner.

Please contact us, or your financial advisor for information on how these changes can help you give back to your community. Contact us at for more information or call 720-733-2656.


This information is provided only for informational purposes and does not serve as tax advice or legal opinion. For such advice and opion, please consult your qualified legal and fnancial advisors.