March 30, 2020 By Abigail Darlington
The latest Coronavirus stimulus package, the CARES Act, was signed into law Friday, creating a temporary Universal Charitable Deduction and providing nonprofits with access to emergency loans. While the Universal Charitable Deduction provision doesn’t go quite as far as CCF had hoped, it’s still a positive step to encourage more charitable giving during a time of great need.
The legislation creates a new above-the-line deduction that applies to all taxpayers for total charitable contributions of up to $300. The incentive applies to donations made to nonprofits this year and can be claimed on personal income tax filings next year. The measure also lifts an existing cap on annual contributions for itemizers of 60 percent of adjusted gross income to 100 percent. For corporations, the same cap was increased from 10 percent to 25 percent.
These changes will hopefully encourage more Americans to support nonprofits across the country facing financial strain due to the COVID-19 pandemic.