Montana Tax News You Can Use
Did you make charitable contributions in 2020?
You may be eligible for tax deductions. Read on for more information or consult your tax professional.
$300 Charitable Contributions
As a result of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), taxpayers who take the standard deduction on their federal income tax return can take a $300 above-the-line deduction for charitable contributions they made in 2020.
Many Montana tax filers take the standard deduction on their federal return and itemize their deductions on their Montana return. The $300 contribution amount is allowable in determining a taxpayer's Montana Adjusted Gross Income. However, it is not allowed as an itemized deduction. When preparing a Montana income tax return, be sure to not include these amounts as charitable contributions on the Form 2, Itemized Deductions Schedule.
Reminder about the Charitable Contribution Deduction
Taxpayers may take a Montana itemized deduction for contributions made to qualified organizations, churches, and governments. The contributions must be made for the use of the organization's mission and may include donations in the form of cash, property, or services.
The amount of a taxpayer's contribution must be reduced by any benefits received. Examples of benefits can include payments for entrance to a charity dinner or gala, purchase of raffle tickets, payment for services, and gifts received as a result of the donation. See IRS Publication 526 for more deductions that are not allowed.
When claiming a deduction for charitable contributions, taxpayers should substantiate their deductions with a statement that details the date of the contribution, the amount, and the value of any benefit they may have received. The statement must be provided by the organization at the time a contribution is made or before the tax return is filed. Recently, the department has seen many statements from charitable organizations that do not include language indicating that the taxpayer did not receive any benefits or services from the organization. If this is the case on your 2020 statement, contact the charitable organization to get a corrected statement.
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