CARES Act Tax Advantages for Donors – 2021

CARES Act Tax Advantages for Donors – 2021 2021-12-14T17:54:14-04:00

2020 and 2021 have been a difficult years for our country, our community and many of our friends and neighbors right here in our city. Even before the current crisis, 54% of Miami-Dade households were either living in or one emergency away from poverty. For many families, this pandemic was that one emergency that has exacerbated the needs in our community. But there’s a new way you can help!

Take advantage of new financial incentives implemented last year for those who give generously to qualifying charities, including United Way Miami. The new universal tax break for charitable donations was included in the COVID-19 stimulus package commonly known as the CARES Act that was signed into law in 2020 and elements of it have been extended to 2021.

The $300 deduction was extended through 2021 and doubled ($600) for couples filing jointly. Taxpayer Certainty and Disaster Tax Relief Act (Public Law 116-260) – Expanded the temporary universal charitable deduction to $300 for individuals and $600 for joint filers and extended its availability through 2021. Right now, the $300 deduction expires at the end of this year.

100% limit on eligible cash contributions made by itemizers in 2021. Subject to certain limits, individuals who itemize may generally claim a deduction for charitable contributions made to qualifying charitable organizations. These limits typically range from 20% to 60% of adjusted gross income (AGI) and vary by the type of contribution and type of charitable organization. For example, a cash contribution made by an individual to a qualifying public charity is generally limited to 60% of the individual’s AGI. Excess contributions may be carried forward for up to five tax years.

The law now permits electing individuals to apply an increased limit (“Increased Individual Limit”), up to 100% of their AGI, for qualified contributions made during calendar-year 2021. Qualified contributions are contributions made in cash to qualifying charitable organizations.

As with the new limited deduction for nonitemizers, cash contributions to most charitable organizations qualify, but, cash contributions made either to supporting organizations or to establish or maintain a donor advised fund, do not. Nor do cash contributions to private foundations and most cash contributions to charitable remainder trusts.

To learn more please visit the government’s CARES Act website.

Please consider this an added incentive to donate—or donate more—to our United Way when we need you most. We’re all in this together. 
Donate Today!