charitable deduction

Normally, corporations can only deduct charitable contributions up to an amount that equals 10 percent or less of their taxable income in the given tax year. Under the CARES Act, this limitation was bumped to 25 percent of taxable income.

More recently, the December 2020 Taxpayer Certainty and Disaster Tax Relief Act (TCDTRA) temporarily upped the limit for corporate charitable contribution deductions to 100% for qualified disaster relief contributions.

The IRS has released additional guidance for corporations considering using the deduction. Here’s what you need to know.