Congress has provided several economic incentives to help address the far-reaching effects of the COVID-19 pandemic, including additional tax incentives to encourage charitable giving. We would like to bring to your attention temporary tax rules for charitable giving enacted by Congress late last year as a part of the Consolidated Appropriations Act of 2021 (CARES Act). Note that these incentives are temporary and are scheduled to expire at the end of 2021.

You may deduct gifts of cash to most public charities to offset as much as 100% of your income in the 2021 tax year! For contributions of cash to public charities like Hartford Hospital, you may deduct cash contributions to offset up to 100% of your income. Previously, the income tax charitable deduction for cash gifts was limited to 60% of your income. This 100% limit allows especially generous donors to reduce their federal income tax to zero. If you are even more generous, you can carry forward unused cash contribution deductions for up to five years.

Because federal income tax rates are progressive, it will not necessarily be to your advantage to deduct 100% of your cash contributions. Check with your financial or other advisors to determine whether the 100% deduction makes sense for your specific circumstances.

If you do not itemize your deductions, you may still reduce your taxable income by up to $300 (or $600 for married couples filing jointly) for your charitable contributions of cash to public charities in 2021.

Qualified charitable distributions remain a smart way to make contributions if you are 70½ or older. A qualified charitable distribution (“QCD” or “IRA charitable rollover”) allows you to make a tax-free gift of up to $100,000 to Hartford Hospital from your IRA in the tax year you reach your 70-1/2 year milestone. If you are subject to Required Minimum Distributions (RMD) in the 2021 tax year, QCD amounts can be used to offset your RMD obligations and reduce your taxable income.
 
You have important priorities for your family and loved ones, and we know that their health and financial well-being comes first. When you are ready, we will be here to help you shape a charitable gift plan that suits your needs and allows you to keep helping with our important work. 

Please contact Melissa Tranberg at Melissa.Tranberg@hhchealth.org or call 860-972-2162 to learn about the many ways you can support Hartford Hospital.