Charitable Deduction Liberalizations – Individuals

The CARES Act makes four significant liberalizations to the rules governing charitable deductions, 2 of which affect individual taxpayers:

  1. Individuals will be able to claim a $300 above-the-line deduction for cash contributions made, generally, to public charities in 2020.  This rule effectively allows a limited charitable deduction to taxpayers claiming the standard deduction.
  2. The limitation on charitable deductions for individuals that is generally 60% of modified adjusted gross income (the contribution base) doesn’t apply to cash contributions made, generally, to public charities in 2020 (qualifying contributions).  Instead, an individual’s qualifying contributions, reduced by other contributions, can be as much as 100% of the contribution base.  No connection between the contributions and COVID-19 activities is required.