The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted last December, provides several provisions to businesses that give to charity. The new law generally extends through the end of 2021 two temporary tax changes originally enacted by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Here is a rundown of these changes.
- The law now permits C corporations to apply an increased limit (Increased Corporate Limit) of 25% of taxable income for charitable contributions of cash they make to eligible charities during calendar-year 2021.
- Businesses donating food inventory that are eligible for the existing enhanced deduction (for contributions for the care of the ill, needy and infants) may qualify for increased deduction limits.
Click here to read the full announcement from the IRS; consult your tax professional to learn more about how these changes might apply to your business.