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MA Delays Charitable Deduction Until 2022

December 29, 2020

While the charitable contribution deduction was set to be reinstated in 2021, this has been delayed until 2022. Here’s what you should be aware of.

Attention Massachusetts Taxpayers: Governor Baker has passed legislation delaying the state’s charitable deduction until 2022. As we covered in a recent blog, MA Brings Back Charitable Deduction for 2021, the charitable contribution deduction was set to be reinstated in 2021. This has since been delayed. Here are the details.

More about the charitable deduction

A common tax saving method, especially at year-end is donating to charity. A donation to a qualified charitable organization can be deducted on schedule A of your federal income tax return as an itemized deduction. Donations can be made in the form of cash, property or appreciated shares of stock.

What’s new?

MA residents will be able to deduct charitable deductions beginning in 2022 for the first time since 2001. Whether or not MA taxpayers itemize, they will be able to deduct charitable deductions on their state tax returns. The donation will be prorated for part year residents and non-residents who earn income in MA.

Deductible contributions on the state level must meet IRS requirements and donations of household goods or used clothing are not deductible for MA state income tax.

Any strategies you should take advantage of now?

Because there is no state tax benefit gained by delating contributions until early 2021, it might benefit you to accelerate charitable contributions into 2020. This could also be of value given the uncertainty of tax law in 2021 under a new administration.

Reach out to a PCS team member for more information about charitable tax planning.

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