No, your federal or state income tax return won't get rejected due to the special $300 charitable contributions deduction.
For 2020, there's a special provision on your federal income tax return. Even if you don’t itemize, you may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualified organizations.
- Under this new change, individual taxpayers can claim an "above-the-line" deduction of up to $300 for cash donations made to charity during 2020.
- This means the deduction lowers both adjusted gross income and taxable income – translating into tax savings for those making donations to qualifying tax-exempt organizations.
When your federal adjusted income transfers to your Iowa state income tax return, it is net of the $300 so TurboTax adjusts and adds the $300 back into Iowa income. The $300 is an "above the line" deduction on your federal income tax return but not an "above the line" deduction on your IA state income tax return.
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