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COVID-19 Relief Law - IRS Guidance Charitable Deductions

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The  Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") Section 2204  amends Section 62 of the Internal Revenue Code of 1986 (the “Code”) by allowing taxpayers that do not itemize, i.e., elect for the standard deduction, their deductions to take a limited above-the-line deduction for charitable contributions. 

Traditionally, the charitable contribution deduction is a below-the-line deduction available only to taxpayers who itemize.  However, the Act allows taxpayers that do not itemize to deduct up to $300 in cash contributions made to qualifying charitable organizations, as described in section 170(b)(1)(A) of the Code, other than supporting organizations (as defined in section 509(a)(3) of the Code) or donor advised funds (as defined in Section 4966(d)(2) of the Code), and treat such contribution as an above-the-line deduction when computing adjusted gross income. 

Excess charitable contributions that have been carried over from prior tax years under Sections 170(b)(1)(G)(ii) or 170(d) are not includable as charitable contributions for purposes of this provision.  The amendments made by this provision apply to taxable years beginning after December 31, 2019.

Category: COVID-19 Relief Law

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