The Consolidated Appropriations Act, 2021 has extended the benefits for charitable contributions made available through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion federal relief package signed into law on March 27, 2020. The following benefits are extended for the 2021 tax year:
Expansion of the universal charitable deduction for cash gifts – The universal charitable deduction has been extended and increased. The new deduction is $300 for single filers and $600 for married couples filing jointly. Taxpayers who take the standard deduction rather than itemizing their deductions will be able to claim this charitable deduction for cash gifts to qualified charities such as Washington University. Please note that the charitable deduction does not qualify for gifts to supporting organizations or donor advised funds.
Extension of the cap on deductions for cash contributions – The CARES Act lifted the cap on annual cash contributions for those who itemize, increasing it from 60% to 100% of AGI for 2020 and 2021. A five-year carryover applies to cash contributions in excess of this amount. Contributions to donor-advised funds are excluded. For corporations, the deduction limitation is increased from 10% to 25% of taxable income.
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