New Charitable Deduction Added

A new charitable deduction was included in the CARES Act. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020.

The CARES Act makes a new deduction available for up to $300 per taxpayer ($600 for a married couple) in annual charitable contributions to nonprofit organizations, such as the Delta Sigma Pi Leadership Foundation.

This is available only to people who take the standard deduction (for taxpayers who do not itemize their deductions). It is an “above the line” adjustment to income that will reduce a donor’s adjusted gross income, and thereby reduce taxable income on their 2020 tax returns when they file in 2021.

Donations since January 1, 2020 counts toward the $300 cap. A donation to a donor advised fund does not qualify for this new deduction.