On December 27, 2020, another stimulus package was signed into law to help combat the far-reaching impacts of COVID-19. One of the items in the bill was the extension of the charitable tax incentives enacted by the Coronavirus Aid, Relief and Economic Security (CARES) Act back in March 2020. The law for year 2021 now permits electing individuals to apply an increased limit, up to 100% of their annual gross income, for qualified contributions made during calendar-year 2021 (this was the same for Year 2020). Qualified contributions are contributions made only in cash to qualifying charitable organizations (Peachtree Road UMC qualifies). Existing carry-over rules still apply, so if your donations this year exceed your annual gross income deduction limits, you may carry forward excess deductions for up to five subsequent tax years. As always, donors should consult with their tax and legal advisors when considering their charitable giving.
This law is scheduled to change for year 2022, and the deduction limit for gifts of only cash to public charities will return to 60%.
Gifts of long-term appreciated securities to public charities can be deducted up to 30% of annual gross income, and this law has not changed from what it was prior to the pandemic.