What nonprofits need to know about Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

Moments ago, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. Here are several provisions in the Act that may affect the nonprofit sector for tax years ending in 2020:

  • Individual tax filers who elect to itemize deductions will be able to offset up to 100 percent of their adjusted gross income (AGI) using the charitable contributions deduction. The current threshold is 60 percent of AGI.
  • Nonitemizers will be able to deduct up to $300 in cash giving in 2020.
  • Nonprofits organized as corporations will be able to offset up to 25 percent of their unrelated business taxable income (UBI) using the charitable contributions deduction. The current threshold is 10 percent.
  • Nonprofits will be able to carryback losses from unrelated business income activities from 2018, 2019, and 2020 for five years and claim refunds of taxes paid in the previous years.
  • Prior year Net Operating Loss (NOL) from UBI activities can offset up to 100 percent of income. Currently only up to 80 percent of UBI can be offset by a NOL.

The May 15 tax deadline for exempt organizations is still in effect. We are monitoring the situation closely and will inform you promptly regarding future developments.