Published February 18, 2021
On December 27, 2020, in response to the ongoing economic strain of the coronavirus pandemic, Congress passed and the president signed into law the COVID-19 Relief and Government Funding Bill, which extends through 2021 various cash charitable giving incentives included in the Coronavirus Aid, Relief, and Economic Security, or CARES, Act of 2020. Those extended provisions are described below. Donor-advised funds are excluded.
- Charitable contribution limits for individuals: The charitable deduction limit for cash contributions by individuals in 2021 has been suspended, allowing a donor to deduct cash charitable contributions up to 100 percent of adjusted gross income (AGI). The prior limit was 60 percent of AGI. The five-year carryover applies to contributions in excess of AGI, but in subsequent years, the then-applicable deduction limit will apply. The 100 percent of AGI limit is not automatic; it must be elected on 2021 tax returns, so consult with your advisers before filing your 2021 tax return.
- Corporations: The charitable deduction limit for cash contributions in 2021 has been increased to 25 percent of taxable income, up from 10 percent.
- Non-itemizers: Donors who do not itemize may exclude up to $300 in cash charitable contributions from their AGI in 2021, thereby avoiding income tax on those contributions. Additionally, non-itemizing couples filing jointly in 2021 can exclude up to $600 from adjusted gross income.
Rutgers University Foundation’s Office of Estate and Gift Planning recommends that you consult with your advisers on these cash charitable giving incentives if you intend to make sizable charitable gifts and you fall into any of the following categories:
- you are 59.5 years of age or older and have considered using your IRA to make charitable gifts
- you are interested in making a sizable charitable gift or speeding up a multiyear pledge
- you have appreciated securities that you intend to use for charitable giving purposes and/or have portfolio allocation decisions that benefit from realized capital losses or capital gains
For more information, contact
Office of Estate and Gift Planning
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