Enhanced Charitable Giving Incentives Explained: What it Means for Donors in 2020

in , ,

On March 27, 2020, Congress passed the Federal economic relief package, also known as the CARES Act (Coronavirus Aid, Relief, and Economic Security). This legislation supports non-profit organizations during the unprecedented environment caused by the coronavirus pandemic and these difficult economic times. Targeted measures include the expansion of Charitable Giving Incentives for both individuals and corporations and providing additional tax relief for taxpayers who support charities.  

As a non-profit organization, JDRF depends on donations from our generous supporterto accelerate life-changing breakthroughs to cure, prevent and treat type 1 diabetes (T1D) and its complications. Although this news emerges out of the current crisis, it provides our donors with the wonderful incentive to support the JDRF community, and ensures our progress continues 

Learn how these new tax policy changes may affect you by reviewing our answers to commonly asked questions below.   

What is the Charitable Giving Incentive? 
 
The Charitable Giving Incentive is a new, above-the-line deduction available to taxpayers who do not itemize their deductions in annual charitable contributions of up to $300. This applies to cash contributions made in 2020 and can be claimed on 2020 Form 1040 when filing in 2021.  
 
Note, this incentive does not apply to contributions to donor advised funds, private non-operating foundations, or section 509(a)(3) supporting organizations. All other contributions for which a deduction is allowable under section 170 are covered. 
 
What if I itemize my deductions? 
 
Cash contributions are 100% deductible. The contribution limits are increased for those who itemize their deductions. The current limits for cash contributions of 60 percent of adjusted gross income have been suspended for contributions made in 2020. 

Note, this does not apply to contributions made to donor-advised funds, private non-operating foundations, or section 509(a)(3) supporting organizations. 

What does this mean for corporations? 

The limit on charitable deductions for cash contributions in 2020 is increased from 10 percent to 25 percent for corporations. Also, the limit on deductions for food donations in 2020 are increased from 15 percent to 25 percent.  
 
Where can I find more information about this? 

The provisions specific to the Charitable Giving Incentive can be found in the CARES Act, Sections 2204-2205. If you have specific questions and need support filling out your tax forms, please contact your tax advisor. To find out more about ways to give to JDRF, please visit jdrf.org/donate

How else was the T1D community supported in the CARES Act? 

This relief package, which was approved by both the House and Senate and signed by the President on March 27, 2020, included three additional benefits for the T1D community. The package: 

  • Extended critical funding support for the Special Diabetes Program (SDP) through November 30, 2020, one of JDRF’s top legislative priorities. 
  • Renewed funding for community health centers, where people can access affordable insulin and other prescriptions.  
  • Required that Medicare Part D plans provide up to a 90-day supply of prescription medications, including insulin, if requested by a beneficiary during the COVID-19 emergency period.  

Countless JDRF advocates have been working diligently for months alongside JDRF staff and with our champions in Congress to achieve these benefits. You can read more about this progress here.

Thank you for your ongoing support of JDRF. Together, we will realize our vision of a world without T1D.  

By Devon Taylor