New COVID Relief Package Passes Congress!
I am sure that just about everyone has been following what Congress has been doing the past few weeks about a new Covid Relief Package. On Monday night, December 21st, Congress passed a huge bill ($2.3 trillion!) that is made up of three main parts: Spending and Appropriations (for all the US Government), Tax Extenders, and finally, Covid stimulus relief.
The final bill is almost 6,000 pages and even those in Congress did not have time to read every part of it. We normally do not post multiple articles and emails, but since it is the end of the year, we are going to attempt to keep you up to date.
Here are a few brief snippets. We will explore more in detail over the next few days.
There will be a second stimulus check. $600 per person, including children. It allows for a $300 supplemental unemployment payment for those on unemployment. There is a second round of PPP loans, but targeted more directly to small businesses. It extended the number of weeks one can be on unemployment. There are a few benefits for businesses.
For today I want to mention the increased benefits to charitable contributions. As we noted in an earlier post, the CARES Act passed early in 2020 allows for an above the line charitable deduction of $300, even if a taxpayer does not itemize deductions. The new bill allows for a $600 deduction ($300 for a single filer) and has extended it through 2021. Again, this deduction is “above the line” and available to all taxpayers, even those who do not itemize.
A caveat. It has to be a cash donation. For the IRS, this means, cash, check or charge. There are some limits on who you can contribute to, but they are specialized deductions. See your tax preparer if you have questions. Finally, the donation needs to be made by December 31st to count for this year. The regular charitable donation rules still apply.
Stay tuned for more on this (not so unusual) end of the year tax act.
Please feel free to contact us if you have any questions.