Friday, April 17, 2020
ANSWER FOUND: Why the $300 Above-the-Line Charitable Contribution Is Only Available for Tax Years Beginning in 2020
Thanks to a sharp-eyed reader of this blog (NYU Professor Harvey Dale), I now have the answer to why the $300 above-the-line charitable contribution deduction is only available for contributions made during taxable years beginning in 2020. The relevant section of the CARES Act (2204) adds a paragraph to Internal Revenue Code section 62(a) that says the following (emphasis added):
(22) CHARITABLE CONTRIBUTIONS.—In the case of taxable years beginning in 2020, the amount (not to exceed $300) of qualified charitable contributions made by an eligible individual during the taxable year.”.
So while the effective date language only says "shall apply to taxable years beginning after December 31, 2019," the above quoted language limits the deduction to taxable years beginning in 2020. For the vast majority of individuals, the taxable year that begins in 2020 will be the 2020 calendar year. However, individuals are in some circumstances able to choose a non-calendar fiscal year for tax purposes (see IRS Publication 538, p. 4). So the Joint Committee on Taxation scoring publication was not completely accurate in describing the deduction as "sunset 12/31/20".