This holiday season, the need for services provided by area non-profits is as great as it’s ever been. As they tirelessly work to provide critical services during the COVID-19 pandemic, our local nonprofits need our support to continue to provide assistance to the most vulnerable members of our community.
The cumulative impact of the COVID-19 pandemic continues to be felt in every corner of our community throughout 2021. Recognizing that our nonprofit sector faces a long and difficult rebuilding process, I would like to thank all those donors that have stepped up during this challenging time and encourage all of you to support your favorite nonprofit this holiday season. As you plan your year-end giving, keep in mind these tax provisions.
Extended + Expanded CARES Act Provisions
Recognizing the vital role that nonprofit organizations continue to play in every community, several of the charitable giving provisions established through the CARES Act in 2020 were extended or expanded in 2021.
- A $300 deduction for those who claim the standard deduction. Individuals who plan to take the standard deduction for their 2021 tax returns may claim an above-the-line deduction of up to $300 for cash donations to qualifying public charities.
- A $600 deduction for married couples who claim the standard deduction. For 2021, this above-the-line deduction has increased to $600 for cash donations for married couples filing jointly who do not itemize tax deductions.
- Charitable giving deduction limit increased to 100% of Adjusted Gross Income (AGI) on cash donations for those who itemize. Donors may continue to receive a federal income tax deduction for charitable contributions of up to 100% of their AGI for certain cash donations made during the calendar year 2021.
- AGI limit for cash contributions increased to 25% of taxable income for corporations. The AGI limit for cash contributions also remains increased for corporate donors. Corporations can deduct up to 25% of taxable income.
It is important to note that the suspension of the Required Minimum Distributions (RMD) from most retirement plans has not been extended into 2021. Although IRA Distributions cannot be contributed to a donor advised fund or a supporting organization, they offer an opportunity to reduce your taxable income while supporting a scholarship, area of interest, or specific nonprofit, including the initiatives and funds at CFSA, such as our CORE Grants Program, Center for Healthy Nonprofits, or Field of Interest Impact Fund.
To make a Qualified Charitable Distribution from your IRA to a nonprofit, I recommend starting the process as soon as possible to ensure that your gift is received on or before December 31, 2021.
Please discuss these items with your tax and/or financial advisor, as requirements and exceptions may apply.
We Are Here to Support You
If you need help determining how to best support local efforts to create a vibrant and equitable community for all Southern Arizonans, please don’t hesitate to call or email our team. You can reach us at 520-770-0800 or by email at firstname.lastname@example.org.
This holiday season, give the gift of generosity. Contact your favorite nonprofit and ask how you can help. Together, we can continue to support the vital nonprofit organizations in our community that support those in need, as well as enrich our lives and make Tucson a special place to live.
To learn more about CFSA’s services and impact, please visit cfsaz.org.
Jenny Flynn is president and CEO of the Community Foundation for Southern Arizona.