Consolidated Appropriations Act, 2021: Charitable Deduction for Non-Itemizers

For tax years beginning in 2021 only, the Consolidated Appropriations Act, 2021 allows an individual who does not itemize to claim a deduction of up to $300 ($600 in the case of a joint return) for charitable contributions made during the year.

In general, an itemized charitable deduction for any tax year is limited to a percentage of the taxpayer’s adjusted gross income (AGI). The percentage is determined by the type of organization receiving the donation and the type of property donated.

A qualified charitable contribution for purposes of the 2021 deduction is a charitable contribution made in cash that would otherwise be allowed as an itemized deduction and contributed to churches, nonprofit educational institutions, nonprofit medical institutions, public charities, or any other qualified charitable organization. The contribution cannot be made to a supporting organization or a new or existing donor advised fund. In addition, a qualified charitable contribution for this purpose does not any apply to cash contributions carried over from previous tax years.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act allows an above-the-line deduction for non-itemizers in tax year 2020, However, unlike the provision under the CARES Act, the deduction for 2021 is claimed as deduction in calculating taxable income and not as an above-the-line deduction in calculating adjusted gross income (AGI).

If you would like more information on how you may benefit from the charitable contribution for taxpayers who do not itemize, please call our office at 847-240-1040 or contact us online. We are here to help you.

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