This universal charitable deduction was a temporary measure enacted only for 2020 and 2021. That means this deduction will not be available for 2022 and later unless Congress amends the law.
For 2021 the maximum deduction is increased to $600 for married individuals filing joint returns ($300 per taxpayer).
Beginning in tax year 2020, taxpayers who claim the standard deduction, may now also claim up to $300 of cash contributions made to qualifying organizations, within the tax year per return.
Prior to tax year 2020, all contributions/donations to charity must have been reported on Schedule A as an itemized deduction. Taxpayers who claimed the standard deduction could not report any amounts donated to charity.
Noncash donations do not qualify for this above-the-line deduction and must be reported as an itemized deduction.
What is a Qualifying Organization?
Organizations that operate in specified purposes and that meet certain other requirements are tax exempt under Internal Revenue Code Section 501(c)(3).
It is recommended to use the IRS' Tax Exempt Organization Search tool to locate organizations that are qualified according to IRC § 501(c)(3) .
How do I report this portion?
You will still need to enter this amount within the Itemized Deduction section. However, the program will automatically pull this amount as a deduction, even if you are taking the standard deduction.
To enter this within the program, please go to:
- Federal Section
- Itemized Deductions
- Gifts to Charity
- Cash Gifts to Charity
To learn more about this change, please click here.