| Date: | 01/03/2025 |
|---|---|
| Organization: | Massachusetts Department of Revenue |
| Regulatory Authority: | Massachusetts General Laws |
| Official Version: | Published by the Massachusetts Register |
830 CMR: DEPARTMENT OF REVENUE
830 62.00: INCOME TAX
830 CMR 62.3.2: Charitable Contribution Deduction
(a) Statement of Purpose. 830 CMR 62.3.2 explains the application of the charitable contribution deduction allowed by M.G.L. c. 62, § 3(B)(a)(13) against Part B adjusted gross income in determining Part B taxable income.
(b) Outline of Topics. 830 CMR 62.3.2 is organized as follows:
1. Statement of Purpose, Outline of Topics
2. Definitions
3. General Rule
4. Charitable Contribution Deduction Calculation
5. Taxable Years in Which a Deduction May Be Claimed
6. Part-year Resident and Nonresident Taxpayers
7. Exempt Unincorporated Associations
8. Trusts and Estates
9. Partners and S Corporation Shareholders
10. No Double Benefit
11. Record Keeping
For purposes of 830 CMR 62.3.2 the following terms shall have the following meanings:
Code, the Internal Revenue Code of the United States, as defined in M.G.L. c. 62, § 1(c).
Commissioner, the Commissioner of the Massachusetts Department of Revenue, or the Commissioner’s duly authorized representative.
Taxpayer, any individual or entity subject to taxation under M.G.L. c. 62 and entitled to take a charitable contribution deduction under M.G.L. c. 62, § 3(B)(a)(13).
M.G.L. c. 62, § 3(B)(a)(13) allows a personal income tax deduction for charitable contributions based on the federal charitable contribution deduction allowed or allowable under Code § 170, including any carryover allowed therein, with certain modifications described in 830 CMR 62.3.2(4). Taxpayers are not required to claim a federal charitable contribution deduction in order to claim a Massachusetts charitable contribution deduction. The Massachusetts charitable contribution deduction is generally available only for contributions made in taxable years beginning on or after January 1, 2023. However, any amounts attributable to charitable contributions made prior to January 1, 2023 and carried over to tax years beginning on or after January 1, 2023 on the taxpayer’s federal income tax return are includable in calculating the Massachusetts charitable contribution deduction.
(a) To be deductible, a charitable contribution must be made on or after January 1, 2023, except as described in 830 CMR 62.3.2(4)(d), and meet all the requirements, conditions, and limitations for deducting charitable contributions under Code § 170 as amended and in effect as specified in M.G.L. c. 62, §1(c), except that the following rules shall apply:
(b) A taxpayer that itemized deductions and claimed the charitable contribution deduction on their federal return should use as their starting figure in calculating the Massachusetts deduction the amount reported for federal purposes representing contributions to charity. A taxpayer that did not itemize deductions or claim a charitable contribution deduction on their federal return should use as their starting figure the amount they would have reported for federal purposes representing contributions to charity had they itemized and claimed a charitable contribution deduction on their federal return. In either case, such amount, including any federal carryover amount from a prior year, must then be reduced and/or adjusted by the modifications referenced in 830 CMR 62.3.2(4)(a).
(c) In calculating the Massachusetts charitable contribution deduction, the federal limitation on itemized deductions under Code § 68 does not apply.
(d) Any amounts attributable to charitable contributions made prior to January 1, 2023 and carried over to tax years beginning on or after January 1, 2023 on the taxpayer’s federal income tax return are includable in calculating the Massachusetts charitable contribution deduction provided such charitable contributions otherwise meet the requirements described in 830 CMR 62.3.2(4)(a).
Commencing with taxable year 2023, charitable contributions may be deducted in any succeeding taxable year for which the rate of tax on Part B taxable income, imposed under M.G.L. c. 62, § 4(b), in the prior taxable year was equal to 5 percent.
(a) Part-year Resident Taxpayers. Part-year resident Taxpayers may deduct the dollar amount determined by multiplying their charitable contribution deduction, calculated in the same manner as for full-year resident Taxpayers under 830 CMR 62.3.2(4), by the part-year resident pro-ration formula, which is the number of days of Massachusetts residency divided by 365.
(b) Nonresident Taxpayers. Nonresident Taxpayers may deduct the dollar amount determined by multiplying their charitable contribution deduction, calculated in the same manner as for full year residents under 830 CMR 62.3.2(4), by the fraction representing their income subject to tax in Massachusetts divided by their total income from all sources. See 830 CMR 62.5A.1(8)(b).
The Massachusetts unrelated business income of an exempt unincorporated association is subject to tax under M.G.L. c. 62. An association’s Massachusetts unrelated business income is its federal gross income derived from its unrelated business activity, with the modifications set forth in M.G.L. c. 62, § 2. If the association is engaged in an unrelated trade or business, the association is generally entitled to the deductions allowed under M.G.L. c. 62, including the charitable contribution deduction under M.G.L. c. 62, § 3(B)(a)(13), that are directly connected with that trade or business. See 830 CMR 63.38T.1(5)(a) – (c). The charitable contribution deduction, however, is allowed to an exempt unincorporated association engaged in an unrelated trade or business even when the contribution is not directly connected with that trade or business. See Code § 512(b)(10).
Generally, trusts and estates cannot claim a charitable contribution deduction against Part B income under M.G.L. c. 62, § 3(B)(a)(13). Instead, amounts paid to, or irrevocably set aside for, public charitable purposes, or paid to or irrevocably set aside for the benefit of an organization established and operated exclusively for charitable purposes, are deductible by trusts and estates against Part B adjusted gross income only as provided in M.G.L. c. 62, § 3(B)(a)(2).
(a) Partners. Massachusetts generally follows the federal income tax treatment of partnerships and their partners under Code §§ 701 through 761. See M.G.L. c. 62, § 17. Code § 703(a)(2)(C) provides that the taxable income of a partnership is computed in the same manner as in the case of an individual except that the deduction for charitable contributions provided in Code § 170 is not allowed to the partnership. Instead, under Code § 702(a)(4) each partner takes into account separately the partner's distributive share of the partnership's charitable contributions.
(b) S Corporation Shareholders. Massachusetts generally follows the federal income tax treatment of S corporations and their shareholders under Code §§ 1361 through 1368. See M.G.L. c. 62, § 17A. Code § 1363(b)(2) provides that the taxable income of an S corporation is computed in the same manner as in the case of an individual, except that the deductions referred to in Code § 703(a)(2), including the deduction for charitable contributions provided in Code § 170, is not allowed to the S corporation. Instead, under Code § 1366(a)(1)(B) each S corporation shareholder takes into account separately the shareholder’s pro rata share of the S corporation’s charitable contributions.
A Taxpayer claiming a charitable contribution deduction under M.G.L. c. 62, § 3 (B)(a)(13) may not claim any other deduction or credit otherwise allowable under M.G.L. c. 62 with respect to the same charitable contribution.
Taxpayers claiming the charitable contribution deduction must follow the record keeping and substantiation requirements of Code § 170 and the regulations thereunder, regardless of whether they claim a charitable contribution deduction on their federal returns. Taxpayers must keep records to substantiate cash and noncash charitable contributions. Taxpayers that are deducting noncash charitable contributions with a total value of over $500 must file with the Commissioner a copy of Federal Form 8283.
REGULATORY AUTHORITY
830 CMR: 62.3.2: M.G.L. c. 14, § 6(1); M.G.L. c. 62C, § 3; M.G.L. c. 62.
REGULATORY HISTORY
Date of Promulgation: 1/3/25
