WASHINGTON – The U.S. Internal Revenue Service has reminded taxpayers of a new special provision under which even more people this year will be able to give up to $300 to donate to approved charities.

Under special tax law changes made earlier this year, cash donations of up to $300 made before Dec. 31, 2020, are now deductible when filing a tax return in 2021.

IRS Inspector Chuck Rettig: “U.S. charities are struggling to help those suffering from COVID-19, and many deserving organizations are taking advantage of any help they receive. “The IRS is recalling a new provision that provides deductions from income of up to $300 in cash donations to charities on an approved list. We urge citizens to take notice of this new provision and help tax-exempt organizations in need, people in need, and help with needed tasks.”

The Coronavirus Assistance, Relief and Economic Security (CARES) Act, passed in the spring of 2019, includes several temporary tax changes to help charitable organizations. Among them is a $300 special deduction designed, in part, for individuals who prefer to use the standard deduction rather than the itemized deduction.

So far, nearly nine out of 10 taxpayers receive the standard deduction and could potentially apply for a new tax deduction. 2018 is the last tax year for which full reporting is available, and more than 134 million taxpayers applied for the standard deduction during that period, representing just over 87 percent of all filers.

Under this change, individual taxpayers can claim an “over-the-limit” deduction of up to $300 for cash donations to charity during 2020. That is, the deduction reduces both adjusted gross income and taxable income, so those who donate to organizations on the approved tax-exempt list can save on taxes.

The IRS reminds taxpayers that in order to make a donation, taxpayers can use the Special Tax Exempt Organization Search (TEOS) Tool (English) at IRS.gov to see if the organization selected is eligible to receive tax-deductible donations.

Cash donations include donations by check, credit card, or debit card. This does not include securities, household items or other property. Most charities accept cash donations, but some do not.

Donations to most charities qualify for the deduction, but donations to sponsoring organizations and donor-advised funds do not.

The IRS reminds everyone who donates to charity to keep accurate records. Under the law, special accounting rules apply to any taxpayer who applies for a charitable contribution deduction. A receipt or letter of acknowledgement from the charity must usually be obtained before filing the tax return and a paid check or credit card receipt must be retained.

In addition, the Coronavirus Relief, Benefits and Economic Security Act (CARES) includes other temporary provisions for charity assistance. These include increased limits on the amount of charitable contributions for corporations, individuals making donations, and businesses that donate food supplies to food banks and other charities on the approved list.