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The Consolidated Appropriations Act and Charitable Giving in 2021

The Consolidated Appropriations Act signed into law on December 27, 2020, extends three philanthropic provisions from the 2020 CARES Act into 2021 that may be of particular interest to individuals (and corporations) who may be considering a gift to Craig Hospital.

Highlights of those extensions are noted below and should be discussed with your professional advisors to determine their applicability to your specific tax situation.

  • 100% of AGI limit available for cash gifts to most public charities: Individuals may deduct cash gifts to public charities in an amount up to 100% of their adjusted gross income (AGI). Gifts to donor-advised funds (DAFs) or supporting organizations (SOs) are not eligible for this special election.
  • For people who do not itemize, a deduction in taxable income can be made up to $300 for single filers (or married couples that file separately) or for up to $600 for a married couple that files jointly. It is not available for gifts to DAFs or SOs. Note that the law restructures the deduction so that it is a reduction from taxable income rather than AGI.
  • Cash contributions from corporations remains at the increased rate of 25% for 2021. The usual 10% limit still applies to other charitable contributions by corporations, and those contributions reduce the 25% limit dollar-for-dollar. Qualified cash contributions in excess of the 25% limit can be carried forward for up to 5 years under the usual limits.

Please note that the above applies to federal taxes only; state law may vary. For more information about how the extension of these CARES Act provisions may impact your specific financial situation, please consult with your tax, legal, or financial advisor(s).