830 CMR: DEPARTMENT OF REVENUE
830 CMR 62.00: INCOME TAX
830 CMR 62.00 is amended by adding the following section:
830 CMR 62.3.2: Deduction for Charitable Contributions
Regulation 830 CMR 62.3.2: Deduction for Charitable Contributions
830 CMR: DEPARTMENT OF REVENUE
Table of Contents
(1) Statement of Purpose, Effective Date, Outline of Topics
(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).
(b) Effective Date. 830 CMR 62.3.2 shall be effective for tax years beginning on or after January 1, 2001.
(c) Outline of Topics. 830 CMR 62.3.2 is organized as follows:
1. Statement of Purpose
3. Qualifying Contributions
4. Amount Deductible
5. Income Subject to Deduction
7. Part-year Residents, Nonresidents
8. Entities Taxable under M.G.L. c. 62
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.
Commissioner, the Commissioner of the Massachusetts Department of Revenue, or the Commissioner's duly authorized representative.
Taxpayers, individuals taxable under M.G.L. c. 62 and entitled to take deductions under M.G.L. c. 62, § 3(B).
(3) Qualifying Contributions
In order to be deductible, a contribution must be paid on or after January 1, 2001 and meet all the requirements for deductibility of charitable contributions under Code § 170. An amount representing a charitable contribution may be deducted only once.
(4) Amount Deductible
(a) Starting Figure. A taxpayer who itemizes deductions on his or her federal income tax return for the taxable year shall use as a starting figure the amount entered on Internal Revenue Service Form 1040, Schedule A, representing gifts to charity. A taxpayer who does not itemize deductions on his or her federal income tax return for the taxable year shall use as a starting figure the amount that would be entered on Schedule A, representing gifts to charity, following all applicable limits and requirements, as though the taxpayer were calculating a federal deduction for gifts to charity. The starting figure is not reduced even if the individual's federal adjusted gross income exceeds the threshold amount specified in Code § 68.
(b) Amount for Contributions Made Prior to January 1, 2001 and Carried Over to the Current Year on the Taxpayer's Federal Income Tax Return. The Massachusetts deduction for charitable contributions shall be the amount that results after any amounts representing charitable contributions made prior to January 1, 2001 and carried over to the current year on the taxpayer's federal income tax return are subtracted from the starting figure.
(5) Income Subject to Deduction
The Massachusetts charitable contribution deduction is one of the deductions taken against Part B adjusted gross income to arrive at Part B taxable income. The deduction cannot be taken against Part A or Part C income.
If the amount of the Massachusetts charitable contribution deduction exceeds the taxpayer's Part B adjusted gross income, the excess may be deducted in the succeeding taxable year. A charitable contribution deduction amount may be carried over for up to five taxable years succeeding the taxable year in which the contribution was made, to the extent it exceeds the taxpayer's Part B adjusted gross income each year.
(7) Part-year Residents and Non-residents
(a) Part-year Residents. Part-year residents may deduct the figure that results when they multiply their charitable contribution deduction, calculated in the same manner as for full year residents 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) Non-resident Taxpayers. Non-resident taxpayers may deduct the figure that results when they multiply 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).
(8) Entities Taxable under M.G.L. c. 62.
The deduction for charitable contributions under M.G.L. c. 62(B)(a)(13) is not available to entities taxable under M.G.L. c. 62.
(a) Fiduciaries. All fiduciary taxpayers that claim a deduction for charitable contributions, including those that deduct charitable contributions from federal income tax pursuant to Code § 170, shall deduct qualifying charitable contributions under M.G.L. c. 62, § 3(B)(a)(2) and not under M.G.L. c. 62 § 3(B)(a)(13).
(b) Flow-through Entities.
1. Partners take charitable contributions separately as each partner's distributive share of the partnership's charitable contribution. (See Code § 702(a)).
2. S corporation shareholders take charitable contributions separately as each shareholder's share of the S corporation's charitable contribution deduction. (See Code § 1366(a)(1)).
(c) Corporate Trusts. Corporate trusts may not claim the deduction because under M.G.L. c. 62, § 8(a), a corporate trust is not allowed to claim deductions under M.G.L. c. 62, § 3(B).
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 itemize charitable contributions on their federal returns. Taxpayers must keep records to substantiate cash and noncash charitable contributions. Those who are deducting noncash charitable contributions with a total value of over $500 must file with the Commissioner a copy of Federal Form 8283 whether or not they itemize for federal tax purposes.
830 CMR: 62.3.2: M.G.L. c. 14, § 6(1); M.G.L. c. 62C, § 3; M.G.L. c. 62.
Date of Promulgation: 12/21/01