The new universal tax break for charitable donations was included in the final $2 trillion COVID-19 stimulus package signed into law last week and will go into effect starting with the 2020 tax year.
The measure grants taxpayers an above-the-line deduction for up to $300 in charitable donations given in 2020. For example, if you take the standard deduction and give $300 to charity, you will get a $300 tax break in addition to the standard deduction. Here is the tax benefit break down for those taking standard deductions, itemized deductions, and corporate giving:
For people who take the standard deduction, the CARES ACT allows you to take a tax deduction for contributions made to qualified charitable entities up to $300 per year starting in 2020 – this deduction is “above-the-line.” The 2020 Standard deduction is $12,400 for individuals and $24,800 for married couples filing jointly. Therefore, any donation to qualifying charities of up to $300 will be added to the standard rate of deduction. This deduction applies for 2020 and beyond.
For people who file for itemized deductions, the CARES ACT allows you to take a tax deduction of up to 100% of your Adjusted Gross Income (AGI) for contributions to qualifying charities starting in 2020. The new law temporarily lifts the limits on charitable giving from 60% of a taxpayer’s AGI to 100% for 2020.
For corporate donors, the CARES ACT allows an entity to take a tax deduction of up to 25% of their Adjusted Tax Income for contributions to qualifying charities starting in 2020. The new law temporarily lifts the limits from 10% of adjusted taxable income to 25% for 2020.
4 tips for avoiding a Coronavirus stimulus payment scam
Only use irs.gov/coronavirus to submit information to the IRS – and never in response to a call, text, or email.
The IRS won’t contact you by phone, email, text message, or social media with information about your stimulus payment, or to ask you for your Social Security number, bank account, or government benefits debit card account number. Anyone who does is a scammer phishing for your information.
You don’t have to pay to get your stimulus money.
The IRS won’t tell you to deposit your stimulus check then send them money back because they paid you more than they owed you. That’s a fake check scam.
Economic Impact Payment - How and Who can receive click here
New Spanish language version unveiled
IR-2020-83, April 28, 2020
WASHINGTON – The Internal Revenue Service today reminds low-income Americans to use the free, online tool Non-Filers: Enter Payment Info Here to quickly and easily register to receive their Economic Impact Payment.
The IRS has recently released a new Spanish language version of the tool to help even more Americans get their money quickly and easily.
"The IRS is working hard to find new ways for people who don't have a filing requirement to receive their Economic Impact Payment," said IRS Commissioner Chuck Rettig. "The Non-Filers tool is an easy way people can register for these payments. I appreciate the work of the Free File Alliance to quickly develop a Spanish-language version of this tool to reach additional people. This is part of a wider effort to reach underserved communities."