IRS Suspends Charitable Contribution Limits

The IRS has suspended its limitations on certain charitable contributions.

The agency announced it is raising the amount of charitable cash contributions taxpayers can deduct on Schedule A as an itemized deduction.

In most cases, that amount is 60% of the taxpayer’s gross adjusted income.

But under the change the IRS announced, qualified contributions will not be subject to the 60% threshold.

Individuals may deduct qualified contributions of up to 100% of their adjusted gross income, and a corporation may deduct up to 25% of its taxable income.

Eligibility

Contributions exceeding that amount can be carried over to next year.

To qualify a contribution must be:

• A cash contribution
• Made to a qualifying organization
• Made during the 2020 calendar year

Non-cash property contributions don’t qualify for this relief, although taxpayers may still claim non-cash contributions as a deduction, subject to the normal limits.

The agency’s website includes information about tax help for taxpayers, businesses, tax-exempt organizations and others—including health plans—affected by the coronavirus.