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Other COVID-19 Credits & Deductions

Coronavirus

Special $300 charitable contribution deduction

The Coronavirus Aid, Relief and Economic Security (CARES) Act includes several temporary provisions designed to help charities. The special $300 charitable contribution deduction allows for a deduction from income of charitable cash donations of up to a total of $300, made to qualifying organizations before December 31, 2020, for individuals who choose to use the standard deduction rather than itemizing their deductions.

Cash donations include those made by check, credit card or debit card. They don’t include donated services, household items, securities or other property. See our Tax Tip for more information.

Educator expense deduction for COVID-19 protective items

The COVID-related Tax Relief Act of 2020, which was enacted as part of the Consolidated Appropriations Act (2021), allows for unreimbursed expenses paid or incurred after March 12, 2020, by eligible educators for protective items to stop the spread of COVID-19 in the classroom, to qualify for the educator expense deduction.

The educator expense deduction permits eligible educators to deduct up to $250 of qualifying expenses per year (up to $500 if married filing jointly and both spouses are eligible educators, but not more than $250 each). Eligible educators include any individual who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during a school year.

Eligible taxpayers claim the deduction on Form 1040, Form 1040-SR, or Form 1040-NR (attach Schedule 1 Form 1040). See the Instructions for Form 1040 and Form 1040-SR or the Instructions for Form 1040-NR for more information.

See Revenue Procedure 2021-15 PDF

Educators can now deduct out-of-pocket expenses for COVID-19 protective items | Internal Revenue Service (irs.gov)

Sick and family leave tax credits for self-employed individuals

The Families First Coronavirus Response Act (FFCRA), allows eligible self-employed individuals who, due to COVID-19, are unable to work or telework for reasons relating to their own health or to care for a family member to claim refundable tax credits to offset their federal income tax. The credits are equal to either the qualified sick leave or family leave equivalent amount, depending on circumstances. IRS.gov has instructions to help calculate the qualified sick leave equivalent amount and qualified family leave equivalent amountCertain restrictions apply.

Eligible self-employed individuals will determine their qualified sick and family leave equivalent tax credits with the new IRS Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals. These can be claimed on the 2020 Form 1040 for leave taken between April 1, 2020, and December 31, 2020, and on the 2021 Form 1040 for leave taken between January 1, 2021, and March 31, 2021.

For more information, see:

Unemployment Compensation Exclusion

Section 9042 of the ARPA allows an exclusion from gross income, for tax year 2020, of up to $10,200 in unemployment compensation, if the adjusted gross income of the taxpayer is less than $150,000 (up to $20,400 if married filing jointly). If your modified AGI is $150,000 or more, you can’t exclude any unemployment compensation (UC). If you file Form 1040-NR, you can’t exclude any unemployment compensation for your spouse.

  • For those who received UC last year and have already filed their 2020 tax return, IRS anticipates it will be able to determine the correct taxable amount of unemployment compensation and tax, and refund any resulting overpayment of tax or apply it to other outstanding taxes owed, with some exceptions. See IRS to recalculate taxes on unemployment benefits; refunds to start in May. So, there is no need for taxpayers to file an amended return unless the calculations make you newly eligible for additional federal credits and deductions not already included on the original tax return. See the example in the News Release. If you do need to file an amended return, see Amending a Tax Return.
  • For those who received UC last year, but have not filed yet, follow the IRS instructions on the New Exclusion of up to $10,200 of Unemployment Compensation page. For additional information, go to About Form 1040 to see the updated Form 1040, Instructions for Form 1040,and Schedule.

For more information , see Tax Treatment of Unemployment Benefits and TAS Tax Tips: The IRS begins adjusting tax returns for unemployment compensation exclusion.