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Pandemic Relief 2021

The following is a brief summary of key tax provisions included in the Consolidated Appropriations Act, 2021, signed into law on December 27, 2020.

Charitable Contributions

  •  The CARES Act permits taxpayers who claim the standard deduction a deduction of up to $300 for qualified charitable contributions made during 2020. The new law extended this provision for 2021 with a maximum deduction of $300 ($600 for Married Filing Jointly).
  •  The increased charitable contribution deduction limit of 100% (from 60%) is extended through 2021.

Tax Provisions Made Permanent

  •  The threshold for deducting medical expenses as an itemized deduction is 7.5% of AGI.
  •  The tuition and fees deduction is no longer available for expenses paid after December 31, 2020.
  •  The Lifetime Learning Credit phaseout range is equal to the American Opportunity Credit effective for tax years beginning after December 31, 2020. The modified AGI limitation for both credits is $80,000 – $90,000 ($160,000 – $180,000 MFJ).
  •  The deduction for energy-efficient commercial building property.
  •  The gross income exclusion for certain benefits provided to volunteer firefighters and emergency medical responders.

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