Tax Changes For Nonprofits In CARES Act
In the Spring of 2020, the United States Congress passed the CARES Act in response to the COVID-19 pandemic. This $2 Trillion relief package was intended to keep individuals, businesses, and other organizations afloat as they navigate the public health crisis. The CARES act contains several elements aimed at helping Americans stay engaged in the economy, and continue donating to charitable causes.
Prior to 2020, charitable contributions could only be deducted if taxpayers itemized their deductions. But now, because of the CARES Act, taxpayers who choose not to itemize deductions may take a charitable deduction of up to $300.00 for cash contributions made in 2020 to qualifying organizations. For the purposes of this deduction, qualifying organizations include those that are religious, charitable, educational, scientific, or literary in purpose.
In addition, the CARES Act temporarily suspends limits on charitable contributions and temporarily increases limits on food inventory contributions.
If you have any questions about how these changes to IRS tax policy will affect your organization, visit this link, or go directly to IRS.gov.