How the CARES Act changes deducting charitable contributions

Whether you are supporting natural disaster recovery, COVID-19 pandemic aid or another cause that’s personally meaningful to you, your charitable donations may be tax deductible. These deductions basically reduce the amount of your taxable income.

Here’s how the CARES Act changes deducting charitable contributions made in 2020:

Previously, charitable contributions could only be deducted if you itemized your deductions.

Now, those who don’t itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. For the purposes of this deduction, qualifying organizations are those that are religious, charitable, educational, scientific or literary in purpose. The law changed in this area due to the Coronavirus Aid, Relief, and Economic Security Act. 

The CARES Act also suspends limits on charitable contributions and temporarily increases limits on contributions of food inventory. 

Here are some resources for anyone making donations:

Tax Exempt Organization Search
You must give to qualified organizations to deduct your donations on your tax return. Use this tool to find out if a specific charity qualifies as a charitable organization for income tax purposes.

Publication 526, Charitable Contributions
This publication explains how you claim a deduction for charitable contributions. It goes over:

  • How much you can deduct.
  • What records you must keep.
  • How to report contributions.

Publication 561, Determining the Value of Donated Property
You generally can deduct the fair market value of property you donate. This publication helps determine the value of donated property.

Form 8283, Noncash Charitable Contributions
You must file Form 8283 to report noncash charitable contributions if the amount of this deduction is more than $500. The instructions for this form walk you through how to complete it.

Schedule A, Itemized Deductions
Anyone deducting donations must do so on Schedule A. The instructions for this form include line-by-line directions for completing it.

Frequently asked questions: Qualified charitable distributions
If you are age 70 ½ or older you can make a qualified charitable distribution from your IRA – up to $100,000 – directly to an eligible charity. It’s generally a nontaxable distribution made by the IRA trustee to a charitable organization. A QCD counts toward your minimum distribution requirement for the year.