On December 27, 2020, the U.S. Government enacted a second stimulus package in response to the COVID-19 pandemic. This new stimulus package extends many of the charitable giving provisions outlined in the original CARES ACT signed in March 2020.
For those who itemize their deductions:
Donors who itemize their deductions can now give more cash before reaching their adjusted gross income (AGI) limitation. Formerly set at 60%, the limitation for cash contributions to certain public charities has now been raised to 100% of an individual’s AGI in 2021. Any giving beyond this 100% limitation may be carried over and used in the next five years. This provision excludes giving to private nonoperating foundations and supporting organizations, along with any contributions to establish or maintain donor-advised funds (DAF).
For those who do not itemize their deductions:
The stimulus package extends through 2021, the CARES Act’s allowance for up to $300 of a tax-payer’s charitable contributions to qualify as an above-the-line-deduction. It increases the amount to $600 for married couples filing joint returns. This means you do not have to itemize deductions in order to claim the $300 (or $600) as a deduction. Qualifying donations must be made in cash or cash equivalents (as opposed to stock, for example) and cannot be directed to supporting organizations or DAFs.