This Giving Season, Take Advantage of New Tax Incentive

Even Those Who Don’t Itemize Can Deduct Up to $300 in Donations

A man wearing a mask places money into a Salvation Army donation ringer at Rockefeller Center on November.

Alexi Rosenfeld / Getty Images 

As the charitable giving season kicks off in earnest, a temporary tax break from the government adds an incentive to donate to a good cause: This year, taxpayers can deduct up to $300 in eligible donations from their income even if they are among the vast majority who file their tax returns using the standard deduction. 

Under normal circumstances, taxpayers can only deduct charitable contributions if they itemize their deductions rather than use the simpler and more popular standard deduction. But a provision of the CARES Act pandemic relief bill changed the rules for this year; those who do not itemize can still deduct as much as $300 in cash donations made to qualifying charities before Dec. 31.

Most taxpayers use the standard deduction because itemizing deductions is typically only in someone’s best interest if the total of all itemized deductions exceeds the amount of the standard deduction of $12,400 for an individual and $24,800 for a married couple filing jointly. The temporary flexibility encourages donations at a particularly critical time—when the COVID-19 crisis has put millions out of work and forced schools and businesses to shut down.

"Our nation's charities are struggling to help those suffering from COVID-19, and many deserving organizations can use all the help they can get," IRS Commissioner Chuck Rettig said in a statement.

In the early months of the pandemic, about a third of U.S. households gave directly to charitable organizations, businesses or individuals, according to a September study by the Lilly Family School of Philanthropy. Charities often raise money during GivingTuesday, an annual campaign that follows Thanksgiving and the Black Friday shopping weekend with a burst of support for good causes.

Only money, not the donation of household items or other property, counts towards the deduction, and the donations must be made to eligible organizations listed on the IRS website.