CARES Act Permits Additional Tax Deductions

As part of the CARES Act, Congress is allowing a temporary taxpayer deduction for donations (up to $300) made in 2020 to qualified nonprofit organizations such as Mid-Continent Railway Museum. This may be attractive for tax filers that do not itemize deductions. This temporary deduction is called an “above the line donation.”

CARES Act Subtitle B, section 2204 in part: Allowance of partial “above the line” deduction to a charitable organization. This donation must be made by an eligible individual. Eligible individual means any individual who does not elect to itemize deductions. A qualified charitable contribution under this section is made in cash and is not for the establishment of a new or maintaining an existing fund. This means the contribution is for the General Fund to help pay invoices during the time the Museum is closed to which regular income is low or nonexistent.

The “above the line” deduction is separate from itemized deductions provided on form 1040 schedule A, and different from the standard deduction that can be claimed on line 40 on form 1040. This is a new deduction probably for the year 2020 only. It also may attract donations from persons that do not itemize but will be able to deduct it from the gross taxable income. Of course, those who itemize can continue to include donations to Mid-Continent as an itemized deduction. Always check with your financial advisor or tax preparer to see how this may impact you.

To make a donation online or instructions for mailing a donation, visit our Donations page.

Thank you for your consideration and help.

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