CARES (Coronavirus Aid, Relief, and Economic Security) Act Update:
CARES Act Tax Incentives Extended in 2021 – are you taking advantage? A couple of key provisions of the CARES Act were extended into the new year (and, in one case, increased). Here’s what the new stimulus package means for you in 2021. Please consult with your tax advisor.
Tax Incentives When You Make a Gift
- Cap on deductions for charitable cash contributions extended
Cash gifts to qualified charities are generally limited to a percentage of a taxpayer’s adjusted gross income (AGI). The CARES Act lifted the cap on annual contributions for those who itemize, increasing it from 60% to 100% of AGI for 2020, and now for 2021. Any excess contributions available can be carried over to the next five years. (For corporations, the law raised the annual limit from 10% to 25% of taxable income.) - Expansion of universal charitable deduction for cash gifts
The universal charitable deduction has been extended and upgraded. The new deduction is $300 for single filers and $600 for married couples filing jointly.This is available to taxpayers who take the standard deduction. This tax incentive is available for cash gifts to qualified charities (but not to supporting organizations or Donor Advised Funds).