Coronavirus Aid, Relief, and Economic Security (CARES) Act

Coronavirus Aid, Relief, and Economic Security (CARES) Act

On Friday, March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The CARES Act is a $2 trillion economic stimulus law intended to provide immediate relief for individuals, nonprofits, businesses, and state and local governments. The CARES Act is the third law enacted in response to the COVID-19 pandemic.

Provisions that Impact Charitable Giving

The measure increases the deduction cap for cash contributions for itemizers to 100 percent of adjusted gross income (AGI). The bill also 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 in 2020 and would be claimed on tax forms next year. Corporations can deduct charitable contributions up to 25 percent of taxable income, up from 10 percent previously.

The increased deduction limits under the CARES Act relate to cash contributions only—donations of stock, real estate, or any non-cash items do not qualify—and must be made directly to a service-providing public charity. Gifts to private foundations and donor-advised funds (even though donor-advised funds are administered by a public charity) do not qualify.

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Provisions that Impact Nonprofit Organizations

The Act also provides significant relief for nonprofit organizations through emergency Small Business Administration Loans, including Paycheck Protection Program Loans and Economic Injury Disaster Loans. National and local resources are listed below for more information.

National Resources

U.S Small Business Administration: Small Business Guidance & Loan Resources

National Council of Nonprofits: Key provisions of sector-wide interest to charitable nonprofit organizations

Local Resources

OneOC Nonprofit Resource Center: Information for nonprofits, volunteers and the community

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