CARES Act Charitable Giving

CARES Act Charitable Giving Incentives Extended -- With a Small Boost

Below are two key provisions of the CARES (Coronavirus Aid, Relief, and Economic Security) Act, which was updated and expanded in December 2020. This law is designed to help you, businesses and nonprofits facing economic hardship during the coronavirus pandemic.

1. An expansion of the universal charitable deduction for cash gifts

The updated law expands charitable giving incentives and allows taxpayers who take the standard deduction to make an above-the-line deduction for cash gifts of up to $300 for single filers and $600 for married couples filing jointly.

Example: A taxpayer who takes the standard deduction and makes a $300 cash gift to Saint Michael’s College in 2021 may claim the $300 deduction in computing their adjusted gross income. The deduction is in addition to the taxpayer’s standard deduction.

2. An extension of the cap on deductions for cash contributions

Contributions to public charities are generally limited to a percentage of a taxpayer’s adjusted gross income (AGI). The CARES Act lifted the cap on annual contributions for those who itemize, increasing it from 60% to 100% of AGI for 2020 (and now for 2021). Any excess contributions available can be carried over to the next five years. For corporations, the law raised the annual limit from 10% to 25% of taxable income.

We are grateful for your generosity, which touches—and changes—the lives of students at Saint Michael’s. Please contact Jen Conetta at jconetta@smcvt.edu or 802-654-2602 to discuss how your gift can impact the student experience at St. Mike’s.