The IRS reminds taxpayers who are planning year-end charitable giving that most Americans can still deduct up to $600 in donations made to qualifying charities on their 2021 federal tax returns, even when they don’t itemize.
This is a special temporary tax code change, first enacted for the 2020 tax year, that has been extended for the 2021 tax year.
Ordinarily, people who take the standard deduction on their federal income taxes cannot claim another deduction for charitable contributions. However, under this temporary change, the nearly nine in 10 Americans who take the standard deduction could deduct charitable giving without itemizing.
Under this temporary provision, individual tax filers, including married individuals filing separate returns, can claim a deduction of up to $300 for cash contributions made to qualifying charities during 2021. The maximum deduction is increased to $600 for married individuals filing joint returns.
Included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in March 2020, a more limited version of this temporary tax benefit originally only applied to tax-year 2020. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted last December, extended it through 2021.
Cash contributions include those made by check, credit card or debit card as well as amounts incurred by an individual for unreimbursed out-of-pocket expenses in connection with their volunteer services to a qualifying charitable organization. Cash contributions don’t include the value of volunteer services, securities, household items or other property.
To receive a deduction, taxpayers must donate to a qualified charity. To check the status of a charity, taxpayers can use the IRS Tax Exempt Organization Search tool.
Recordkeeping rules apply to any taxpayer claiming a charitable contribution deduction. Usually, this includes obtaining an acknowledgment letter from the charity before filing a return and retaining a cancelled check or credit card receipt for contributions of cash.
For details on recordkeeping rules for substantiating gifts to charity, see Publication 526, Charitable Contributions, available on IRS.gov.
