Exempt organization inflation adjusted items for 2021


Authored by RSM US LLP

The IRS announced the annual inflation adjustments applicable to tax years beginning in 2021 (typically, returns filed in 2022) for more than 60 tax provisions, including those affecting exempt organizations, in Rev. Proc. 2020-45 and IR-2020-245.

Of particular interest to exempt organizations are the following items:

  • The exemption of annual dues paid by members to agricultural or horticultural organizations increases from $171 (2020) to $173 (2021)
  • Low cost articles, for purposes of defining an unrelated trade or business, increases from $11.20 (2020) or less to $11.30 or less (2021)
  • Insubstantial benefits that may be received by a donor without reducing the value of the charitable contribution deduction increases from $11.20, $56, and $112 (2020) to $11.30, $56.50, and $113 (2021)
  • The dues limitation to qualify for the reporting exception for nondeductible lobbying expenditures increases from $119 or less (2020) to $120 or less (2021)
  • The penalty associated with a failure to file a 2021 Form 990-T within 60 days of the due date shall not be less than $435 or 100% of the amount required to be shown as tax 
  • The penalty associated with a failure to a 2021 Form 990, Form 990-EZ or Form 990-PF increases as follows:
    • Organizations with gross receipts of $1,094,500 or less: $20 per day, not to exceed the lesser of $10,500 or 5% of gross receipts
    • Organizations with gross receipts exceeding $1,094,500: $105 per day, not to exceed $54,500