By Michelle Masson 

With COVID-19 causing both a public health crisis and an economic crisis in the US, many charities are experiencing a decline in donations.  To assist charities, Congress added a section in the CARES Act of spring 2020 that allows for deductions of $300 for qualified charitable donations for taxpayers who do not itemize deductions.  This is an "above-the-line" deduction, which means it is used to calculate the adjusted gross income (AGI) before the standard deduction is applied.

Any taxpayer who does not itemize deductions is eligible for this deduction, and the $300 limit applies regardless of filing status. And new for 2021, Joint filers now qualify for a $600 deduction,  $300 per spouse.    The contribution must be in cash (check, credit card, cash, payroll deduction, etc.) and cannot be made through the donation of a car or other non-cash items.  If you made a contribution that qualifies for the deduction, make sure you obtain written proof of your donation from the charity.  Lastly, make sure that the organization is a qualifying charity; organizations listed as 509(a)(3) or donor-advised funds do not qualify for this deduction.

If you have questions about whether or not you will be able to take advantage of this opportunity, please call or send us an email and we’ll be happy to review your situation.