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Tax Incentives to Make an Impact in 2021

November 01, 2021
COVID  Cares Act 350

The Coronavirus Aid, Relief and Economic Security (CARES) Act tax benefits are extended through 2021. Act now to make an impact for Baystate Health Foundation and enjoy tax incentives. 

Here's what the CARES Act may mean for you as you support lifesaving and life-enhancing care:

  • Taxpayers who do not itemize are eligible for a special $300 charitable contribution deduction in 2021. Individual taxpayers who take the standard deduction may deduct charitable cash gifts up to $300. In 2021, married couples who file join returns can deduct charitable gifts up to $600. This is an above-the-line "universal deduction" made possible by the CARES Act. Please note that the donation must be to a public charity, such as Baystate Health Foundation. Donations to donor advised funds or most private foundations will not qualify.
  • Donors may deduct up to 100% of cash contributions to public charities such as Baystate Health Foundation. For the 2021 tax year, you may deduct cash contributions to Baystate Health Foundation and most public charities up to 100% of your adjusted gross income (AGI). Ordinarily these deductions would be limited to 60% of your adjusted gross income. What this higher limit means is that especially generous donors may reduce their 2021 federal income tax to zero while making a big impact. Donors who are even more generous, who exceed the 100% election, may carry forward unused cash contribution deductions for up to five years. Please note that contributions to donor advised funds or supporting organizations are not eligible for this special deduction. Please check with your financial or other advisors to determine whether the 100% election makes sense for your specific circumstances.
  • In 2021, corporations may continue to deduct charitable gifts up to 25 percent of the corporation’s taxable income (increased from 10 percent).
  • Qualified charitable distributions are still a great way for donors age 70 ½ or older to make contributions. If you are 70 ½ or older, a qualified charitable distribution (QCD or IRA Charitable Rollover) allows you to contribute up to $100,000 from your traditional IRA to Baystate Health Foundation without paying income tax. A qualified charitable distribution may provide tax advantages and help you save other assets for heirs. Please check with your financial advisor to see how this might work for you.

Baystate Health Foundation understands that the health and well-being of your family and loved ones comes first, yet the CARES Act offers additional tax incentives to encourage charitable giving in 2021. To learn more about the savvy ways you can support Baystate Health, contact Baystate Health Foundation at 413-794-5444 or BHF@BaystateHealth.org.

Please note that this information should not be considered legal, accounting or other professional advice. Please consult your professional advisor.