Increased Charitable Contribution Limits Under CARES Act

In response to the coronavirus pandemic, the CARES Act (Pub. L. No. 116-136) introduced provisions expanding charitable deduction limitations.

Individual Taxpayers

For 2020, individuals can deduct up to $300 of charitable contributions without itemizing. Additionally, cash charitable contributions can now reach 100% of adjusted gross income rather than the previous 50-60% threshold, if elected.

Excluded from these enhanced limits are contributions to private non-operating foundations, supporting organizations, and donor-advised funds.

Property donations do not qualify for the enhanced limits but remain deductible under existing rules. Qualifying contributions from partnerships and S corporations will be tracked on Form K-1.

C Corporations

Corporations can deduct cash charitable contributions up to 25% of taxable income instead of the previous 10% limit for 2020. Food inventory donations receive an increased limitation of 25% rather than 15% of taxable income, requiring no election.

Private non-operating foundations, supporting organizations, and donor-advised funds remain excluded from these enhanced provisions.

Partnerships and S Corporations

These entities must track and separately report qualified versus non-qualified charitable contributions to owners. Owners can then make elections on their individual returns. Enhanced limits apply to qualifying cash contributions only.