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CARES Act – Charitable Giving

By Paul J. Carroll, CFP®December 11, 2020December 1st, 2023Videos

2020 is coming to a close. There are gifting opportunities. In fact, the CARES Act has added a few opportunities. Back in March, on the 27th, the CARES Act was passed. And what wasn’t really given a lot of attention at the time is that some of the rules regarding charitable giving and deductions were changed. The easiest one for the vast majority of people is now the first $300 is above the line. And what that means in English, is you don’t have to be itemizing deductions to allow it to reduce your taxes. That’s a great opportunity. And there’s also some increased deductions for food donations. As we know right now, the food banks and many other organizations are quite desperate for those donations.

Cash donations – always of value – you can now deduct up to 100% of your AGI. So if for some reason with losses or some other event, your AGI is actually quite low this year, you’re no longer limited to 60%. You can give up to 100% of AGI, if that’s important to you. Qualified Charitable Distributions – these are basically distributions from your IRA. If you’re over 70 1/2, any distributions made from your IRA directly to an approved charity, are now not taxable distributions. These are above the line type deductions because you’re not just getting a deduction per se. You’re reducing taxable income. Very powerful way to give. There is a cap at $100,000. Corporate donors – that doesn’t have to be Exxon; that can be a small business, also – can now donate up to 25% in cash of their corporate income for the year.

We’ve been very fortunate this year. Like many companies the year actually turned out quite a bit better than we anticipated. It’s not great on all dimensions, but it certainly could have been an awful lot worse, as it was for many. We have, however, had to cancel the Christmas party. The Christmas party doesn’t make good sense in the next couple of weeks. We’re taking that $15,000 and yesterday we gave a check to the Montgomery County Food Bank. We were able to get a corporate match. We’re very fortunate that Quality Home Products matched us dollar for dollar. So that’s a $30,000 impact, which works out to 150,000 meals for needy families this Christmas. We’re very proud to be able to make good use of the budget. We’re very thankful for all the good things that have happened this year. Most of all, that our clients have not suffered unduly from the COVID virus. We wish you all a much better 2021: healthful, prosperous and happy. Thank you.


Coronavirus Aid, Relief, and Economic Security (CARES) Act – U.S. Department of the Treasury

Founder & CEO at Avion Wealth

Paul is the founder and CEO of Avion Wealth, LLC. He leads a team of wealth managers in building and executing financial plans for high net worth individuals and families. Contact Avion Wealth to speak with a financial advisor.