The end of 2021 brought with it the expiration of many of the provisions of the COVID-19 pandemic relief legislation, including those related to charitable contributions. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed in 2020 and the Consolidated Appropriations Act (CAA) passed in 2021 provided incentives to encourage charitable giving during the pandemic. While these provisions have not been extended into 2022, there are still charitable giving strategies to consider before the end of the year.
Expiring CARES Act & CAA Provisions
Among the most widely used of the CARES Act’s expiring charitable contribution provisions was the ability for non-itemizers to deduct up to a specified amount of cash donations, while still taking the standard deduction. For 2022, only taxpayers who itemize can deduct their charitable contributions.
The CARES Act also removed limits on deductions for certain cash contributions to public charities. These limits revert in 2022 to the pre-CARES Act level of 60% of adjusted gross income (AGI). Deduction limits for certain appreciated non-cash assets held for more than one year remain at 30% of AGI.
Finally, the deduction limitation for donating items such as food inventory returns to being 15 percent instead of the 25 percent set out in the CARES Act. For corporations, this limitation applies to percentage of taxable income, and for non-corporate businesses the limitation applies to the percentage of aggregate net income from the business.
Charitable Strategies & Considerations
Despite the expiration of the noted provisions, there are still a number of charitable planning strategies for taxpayers to consider:
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View articles from Forvis Mazars' 2022 Tax Guide here.