Search Site

Jack Owen’s Tax-Exempt Alert JANUARY 2021

Last year, Congress passed the CARES Act in response to the Covid-19 pandemic. Under the CARES Act, donors who are otherwise not able to itemize deductions in 2020 may be able to take a charitable deduction of up to $300 for cash contributions made in 2020.

The Consolidated Appropriations Act (“CAA”) signed into law on December 27, 2020 has provisions similar to the CARES Act beneficial to certain tax-exempt, charitable organizations permitted to solicit donations. For 2021, the CAA, like the CARES Act, allows a $300 above-the-line deduction for individuals who do not otherwise itemize deductions. A significant change in the CAA from the CARES Act is that the CAA now allows those who are married and filing joint returns to claim an above-the-line deduction of $600 in 2021. The CARES Act included such a deduction to only $300 per tax return filed, thus limiting the amount of the above-the-line deduction for married couples filing a joint return. As a result of the CAA, married couples who file joint returns may consider increasing their 2021 donations made to tax-exempt organizations. Also, the CAA also continues the ability of itemizers to deduct charitable contributions up to 100% of adjusted gross income. Fundraising efforts may wish to highlight these changes to educate taxpayers to increase their charitable giving in 2021.

As with the CARES Act, the CAA also has other provisions which may be of benefit or indirect benefit to tax-exempt organizations. One such provision includes changes to the Paycheck Protection Program, also referred to as PPP. Other provisions include changes to stimulus payments, unemployment compensation and various tax credits. Some of the changes to tax credits include the employee retention credit as well as tax credits for employers offering qualified paid sick and family leave. While these changes may not directly benefit a tax-exempt organization, tax-exempt organizations can make employees, donors and others aware of these tax credits to incentivize donors to support their missions.

Please do not hesitate to contact us if you have any questions on this matter or other matters related to your charitable organization.

We sincerely hope you appreciate receiving the information in this newsletter. But in case you do not want to receive it, please contact Diane Trichtinger at 412.745-1040, or [email protected] to be removed from this list. Likewise, please contact Diane with any colleagues or other persons who you would like to add to this list.

Note: This provides general information regarding matters of interest to tax-exempt organizations. Such information is neither legal advice nor legal opinion concerning particular situations. If legal advice or opinion is required, legal counsel should be consulted.

We would be pleased to address any questions you may have regarding the foregoing or any other tax-exempt issues. For further information, please contact Mike Dutkovich (412-765-0535), [email protected]; Susan Ott (412-745-9900), [email protected]; or Jack Owen (412-765-1020), [email protected].

©Owen Law Group, LLC, 310 Grant Street, Suite 1005, Pittsburgh, PA 15219 412.745.1040

Contact us

Please fill out the form below and one of our attorneys will contact you.

Quick Contact Form

Office Location
  • Pittsburgh Office
    310 Grant Street
    Suite 2200
    Pittsburgh, Pennsylvania 15219
    Phone: 412-745-1040
    Fax: 412-745-3434