Quick Reminder: The CARES Act Added a New $300 Charitable Contribution Deduction for 2020
Earlier this year the Coronavirus Aid, Relief and Economic Security (CARES) Act added a special $300 deduction for cash donations made before December 31, 2020. Cash donations include those made by check, credit card, or debit card. They don't include securities, household items, or other property.
"Our nation's charities are struggling to help those suffering from COVID-19, and many deserving organizations can use all the help they can get," said IRS Commissioner Chuck Rettig. "The IRS reminds people there's a new provision that allows for up to $300 in cash donations to qualifying organizations to be deducted from income. We encourage people to explore this option to help deserving tax-exempt organizations – and the people and causes they serve."
Usually, taxpayers can deduct charitable donations only if they itemize their personal deductions. However, this deduction was designed especially for people who choose to take the standard deduction.
According to the IRS, over 87% of all taxpayers now take the standard deduction. It means that nearly 9 in 10 taxpayers can qualify for the new, up to $300, tax deduction. It reduces your adjusted gross income, which in its turn, defines your eligibility for tax credits.
If you want to know that your charitable contributions qualify for the rules, just make sure that your donation was in cash, you donated to a qualifying organization, and that you did it in 2020.
To make sure the organization is eligible for tax-deductible donations, please, check out the Tax Exempt Organization Search by IRS.
Please remember that the deduction is only temporary and it works for 2020. If you feel like donating, now is the time.