CARES Act Tax Incentives Extended
A couple of key provisions of the CARES (Coronavirus Aid, Relief, and Economic Security) Act were extended into 2021 (and, in one case, increased). Here’s what the new stimulus package means.
1. An expansion of the universal charitable deduction for cash gifts
The universal charitable deduction has not only been extended but given an upgrade. 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).
2. An extension of the cap on deductions for cash contributions
Contributions to public 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 continuing into 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.
This information is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor.
The Painted Turtle is a nonprofit 501(c)(3) organization with Federal Tax ID# 95-4612481. All charitable contributions are tax-deductible to the extent allowed by law.