The Consolidated Appropriations Act of 2021
The Consolidated Appropriations Act, signed into law in late December 2020, extended provisions of the CARES Act to encourage charitable giving in 2021.
Non-itemizers continue to receive tax benefit for giving: During 2021, those who take the standard deduction can reduce their taxable income for gifts of cash, up to $300 for single filers or $600 for married couples filing jointly, to a public charity such as Tufts.
- Giving Opportunity: You can receive a tax benefit for charitable giving even if you do not itemize. This “above the line” adjustment will reduce your taxable income.
Adjusted Gross Income (AGI) limit increase extended: The Consolidated Appropriations Act provides benefits for itemizers too. In 2021, itemizers can qualify for a charitable income tax deduction, up to 100 percent of their adjusted gross income (AGI), for cash gifts to a public charity (up from the previous 60 percent AGI limitation). This 100 percent limit can be reduced by other contributions, such as stock, in the same year.
- Giving Opportunity: If you are considering a leadership gift or wish to fulfill an existing pledge, you may want to make a gift of cash in 2021 to maximize the tax benefits and your philanthropic impact.
- Giving Opportunity: Charitable gift annuities enable individuals to support Tufts University and receive a reliable fixed income for life. It is possible that this legislation applies to cash gifts establishing a charitable gift annuity. Please consult your tax advisor regarding how this law applies to your situation during this tax year.
Limit on cash contributions from corporations increased: The Consolidated Appropriations Act also encourages giving from corporations. The taxable income limit that applies to cash contributions made by corporations to a public charity, such as Tufts, is increased from 10% to 25% in 2021.
- Giving Opportunity: This tax benefit allows corporations to maximize their impact and receive increased tax benefits for their 2021 giving.
Note: While this new legislation increases the benefits for gifts of cash during 2021, please consult your financial advisor to determine the most beneficial way for you to make a gift this year.