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Other COVID-19 Credits & Deductions


Special $300 charitable contribution deduction

For Tax Year 2020

The Coronavirus Aid, Relief and Economic Security (CARES) Act includes several temporary provisions designed to help charities. The special $300 charitable contribution deduction allowed 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 chose 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.

For Tax Year 2021

A special tax provision, under Taxpayer Certainty and Disaster Tax Relief Act of 2020, allowed more Americans to claim a deduction of up to $300 for cash contributions made to qualifying charities during 2021. The maximum deduction is increased to $600 for married individuals filing joint returns.

To receive a deduction, taxpayers must donate to a qualified charity. To check the status of a charity, they can use the IRS Tax Exempt Organization Search tool.

Special recordkeeping rules apply to any taxpayer claiming a charitable contribution deduction. Usually, this includes obtaining an acknowledgment letter from the charity before filing a return and retaining a cancelled check or credit card receipt for contributions of cash. For details on the recordkeeping rules for substantiating gifts to charity, see Publication 526, Charitable Contributions.

For more general information, see the Charitable Contributions page available on IRS.gov.

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), allowed 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), allowed 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.

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Unemployment Compensation Exclusion

Section 9042 of the ARPA allowed an exclusion from gross income, for tax year 2020, of up to $10,200 in unemployment compensation (up to $20,400 if married filing jointly), if the adjusted gross income of the taxpayer was less than $150,000. If your modified AGI was $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  in 2020 and have already filed their 2020 tax return, IRS was able to determine the correct taxable amount of unemployment compensation and tax, and refunded any resulting overpayment of tax or applied it to other outstanding taxes owed, with some exceptions. See IRS to recalculate taxes on unemployment benefits; refunds to start in May. So, there was no need for taxpayers to file an amended return unless the calculations make them 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 in 2020, 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.

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