Disaster relief donations get limited-time 100% deduction
If your company makes a cash charitable contribution for disaster relief, you can take a larger deduction. But only if you act fast.
Your company can deduct up to 100% of your taxable income for cash contributions for relief efforts in qualified disaster areas. That’s due to the Taxpayer Certainty and Disaster Tax Relief Act of 2020.
IRS explains more in a recent announcement.
Here are the specifics on disaster relief donations now.
Window closes Feb. 25
To take advantage of the increased limit you must make the qualified charitable contributions during the period between Jan. 1, 2020 and Feb. 25, 2021.
The relief must go to qualified disaster areas, as declared under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act.
Note: Disaster declarations related to COVID-19 don’t count.
New substantiation requirements
Also, you have some new substantiation requirements for these disaster relief donations.
If you elect this increased limit, your contemporaneous written acknowledgment (CWA) now must include a disaster relief statement. And it should state that the contribution was used, orwill be used, by the eligible charity for relief efforts in one or more qualified disaster areas.
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