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What the CARES Act Means for Your Charitable Giving in 2021

Thank you, as always, for supporting ArtsWave. You may be aware that Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, 2020. On December 27, 2020, another stimulus package was signed into law, this bill extends the charitable tax incentives enacted by the CARES Act, but it also provides some additional provisions. Included in this legislation were several provisions that expand charitable giving tax deductions for 2021:

Are you itemizing deductions?
The adjusted gross income (AGI) limit for cash contributions to qualifying public charities remains increased for individual donors. For cash contributions made in 2021, you can elect to deduct up to 100 percent of your AGI (formerly 60 percent prior to the CARES Act).

Interested in corporate giving?
The AGI limit for cash contributions also remains increased for corporate donors. In 2021, corporations can deduct up to 25 percent of taxable income (formerly 10 percent prior to the CARES Act).

Not itemizing?
The CARES Act allowed for an additional, “above-the-line” deduction for charitable gifts made in cash of up to $300. This provision is extended into 2021 for taxpayers filing single/separately.

New in 2021 is an additional “above-the-line” deduction for those married filing jointly. Joint filers (who aren’t itemizing) will be allowed to take an above-the-line deduction of up to $600 in cash contributions to charity this year.

For more information, please talk with your retirement account administrator or accountant.