The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) enacted last week has some significant appropriations for theater — including a $25 million direct grant to the Kennedy Center and $75 million to the National Endowment for the Arts, for further distribution to nonprofits.
It also contains somewhat smaller-scale provisions to encourage us to make contributions ourselves.
Starting in tax year 2020, individuals who use the standard deduction will be able to deduct as much as $300 for their charitable contributions. Previously, charitable deductions were available only to individuals (including married couples filing joint returns) who itemized their deductions. When Congress increased the size of the standard deduction in 2018, it impacted charitable organizations because many people who previously itemized moved to a standard deduction, which meant they could no longer deduct their charitable contributions. Section 2204 of the CARES Act now makes those contributions deductible, up to $300, even where the taxpayer takes a standard deduction.
Section 2205 of the CARES Act modifies the tax code’s limitations on charitable contributions for individuals and corporations which itemize their deductions. During tax year 2020 only, you can donate up to 100% of your income. In other years, the limit is 60%.
Contributions to most theaters and theater support organizations, including DC Theatre Scene, appear to be eligible for the expanded tax deduction under the CARES Act. You may wish to consult your accountant or tax lawyer for more complete information.
Mary Treanor, an accountant, assisted me in preparing this article.