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Kristen Merrifield

It’s the time of year when charitable giving is often driven either by heart-warming holiday generosity or end of year tax motivation. But 2020 has been different and nonprofits are attempting to recover from a year rife with fundraising challenges such as increased demand and decreased revenue. We also know that lots of taxpayers have struggled with this year’s uncertainty. 

But before we close the door on 2020, there is a positive new tax deduction you should know about that helps nonprofits and taxpayers. 

Did you know that the CARES Act actually increases tax-donation benefits for 2020?

A provision in this act allows taxpayers to deduct up to the first $300 they donate to nonprofits in 2020, even if they choose to take the standard deduction or itemize their return. This deduction is applied per tax return, not per individual.

Now, $300 maybe not sound like much, and amplified the impact has the potential to be huge. 

If you are in a position to donate $300 before December 31, 2020 to a charity or charities, it could result in a tax benefit and assistance to those in need. 

According to a recent article from Forbes, “it is expected that more than 90% of taxpayers will file their taxes in 2020 using the standard deduction, which means without the CARES Act exception, they would not be getting a tax deduction for donations to charity.” Check with your tax professional to ensure your donation(s) are applicable and what deductions may be for those filing jointly. 

Donations must be made to a qualified, 501(c)(3) public charity. It’s worth noting that gifts to private foundations or individuals are ineligible. As of right now, the $300 charitable deduction only applies to 2020 donations.

For Arizona residents who make contributions to charitable organizations, the state offers two different tax credits: one for donations to Qualifying Charitable Organizations and the second for donations to Qualifying Foster Care Charitable Organizations. Individuals making cash donations to these charities may claim these tax credits on their Arizona Personal Income Tax returns.

If you are looking to learn more about nonprofits operating in Arizona, the website offers ways to provide support through donations of money, in-kind items and volunteer hours. 

The bottom line is that whatever you can do, in whatever amount you’re comfortable, both you and the nonprofit you choose will benefit. 

Kristen Merrifield is CEO of the Alliance of Arizona Nonprofits


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