CARES Act Tax Incentives Extended — With a Small Boost

A couple of key provisions of the CARES (Coronavirus Aid, Relief, and Economic Security) Act were extended into 2021 (and, in one case, increased). Here’s what the stimulus package means for you.

Tax Incentives When You Give to Charity

1. An expansion of the universal charitable deduction for cash gifts

The universal charitable deduction has not only been extended but given a well-deserved upgrade. The new deduction is $300 for single filers and $600 for married couples filing jointly. This is available to taxpayers who take the standard deduction. This tax incentive is available for cash gifts to qualified charities (but not to supporting organizations or donor-advised funds).

2. An extension of the cap on deductions for cash contributions

Contributions to public charities are generally limited to a percentage of a taxpayer’s adjusted gross income (AGI). The CARES Act lifted the cap on annual contributions for those who itemize, increasing it from 60% to 100% of AGI for 2020 (and now for 2021). Any excess contributions available can be carried over to the next five years. (For corporations, the law raised the annual limit from 10% to 25% of taxable income.)

3. An added stock benefit

A gift of appreciated stock can enable you to “double up” on tax benefits. For stock you’ve owned for more than a year, you may claim an immediate charitable deduction on your income tax based on the current value of your stock (30% of your AGI) AND avoid capital gains tax on the appreciated value of the donated stock.

We Can Help!

Contact Laura Nettleton, our Chief Development Officer, at or 269-719-9954 to learn more about the renewed and expanded tax incentives for 2021.