How CARES Act Extensions Affect Your 2021 Charitable Tax Donations

To help American workers and businesses mitigate the devastating economic effects of the coronavirus outbreak, in March 2020 the government signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act.

Included in the original CARES Act were key provisions that encouraged individuals and corporations to help nonprofit organizations providing direct services and support to those impacted by COVID-19.

As a result of the Consolidated Appropriations Act, 2021, several of these provisions were extended or expanded into 2021. They may impact your 2021 charitable tax deductions as described below.

• Extension: $300 deduction for those who claim the standard deduction.
  Individuals who plan to take the standard deduction for their 2021 tax returns may claim an above-the-line deduction of up to $300 for cash donations to qualifying public charities. As many as 85 percent of Americans do not itemize their tax returns, making them previously ineligible for charitable deductions.
• Expansion: $600 deduction for married couples.
  For 2021, this above-the-line deduction is increased to $600 for cash donations for married couples filing jointly who do not itemize tax deductions.
• Extension: Charitable giving deduction limit increased to 100 percent of Adjusted Gross Income (AGI) on cash donations for those who itemize.
  Donors may continue to receive a federal income tax deduction for charitable contributions of up to 100 percent of their AGI for certain cash donations made during the calendar year 2021. Prior to 2020, this number was 60 percent.
• Extension: AGI limit for cash contributions increased to 25 percent of taxable income for corporations.
  The AGI limit for cash contributions also remains increased for corporate donors. Corporations can deduct up to 25 percent of taxable income. Prior to 2020, this number was 10 percent.

You can also support Everyone Home DC with a qualified charitable distribution from your IRA, if you are age 70.5 or older. Deduction limitations for charitable gifts to donor-advised funds, private non-operating foundations, and supporting organizations were not changed under the CARES Act.

Questions?

Please talk with your accountant to learn more about the CARES Act specifically. If you have any questions or want to discuss the best way to support Everyone Home DC, please contact Kate Akalonu, Director of Strategic Initiatives at akalonu@everyonehomedc.org. You can also visit our “Make-a-Gift” page to learn more.