In the News

CARES Act Provisions Extended Into 2021

Tuesday, January 26th, 2021

The new stimulus package extends many of the charitable giving provisions outlined in the original Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law in late March of 2020. Here is a recap of those changes, as well as a tweak to the deduction for non-itemizers.

• Individuals Not Itemizing Deductions: may take an above the line charitable deduction of up to $300 for an individual or up to $600 for married couples filing joint returns. In 2020, the deduction was limited to $300 per tax return. With the new provision, married couples filing jointly
basically double the deduction for 2021 if they make $600 in cash gifts to charity.
• Individuals Itemizing: may deduct qualified contributions of up to 100% of adjusted gross income (increased from 60%).
Corporations (C Corporations): can deduct qualified contributions up to 25% of taxable income (increased from 10%).

Nonprofits may also benefit: from the Coronavirus Response and Relief Supplemental Appropriates Act for 2021 through a second round of payments under the Paycheck Protection Program (PPP). Nonprofits that are eligible to apply include:

• Nonprofit organizations that have not previously received a PPP loan and have less than 500 employees.
• Nonprofit organizations that previously received a PPP loan and have fewer than 300 employees and can demonstrate that they experienced a 25% reduction in gross receipts during one quarter in 2020 compared with the same quarter in 2019.

(Costs eligible for loan forgiveness include payroll, rent, utilities and some interest payments. Certain personal protective equipment and other worker safety supplies may also be included this year. More information can be found at www.sba.gov.)

Always consult with your tax advisor for advice on how this may affect your tax situation.
Note: Donations to donor advised funds (DAF) do not qualify for these extended benefits, however, individuals
itemizing may still deduct up to 60% AGI for contributions made to a DAF.