This is due to a new provision in the CARES Act. Previously, charitable contributions could only be deducted if taxpayers itemized their deductions. However, taxpayers who don't itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. For the purposes of this deduction, qualifying organizations are those that are religious, charitable, educational, scientific or literary in purpose. The law changed in this area due to the Coronavirus Aid, Relief, and Economic Security Act.
When you are itemizing, the workaround is to make the software stop treating you as an itemizer, which it must in order to get this $300 credit for you. Here's what to do:
- Delete the $300 in the error check.
- Then go back to Deductions & Credits and enter the contribution there, in the Donations to Charity topic.
- Then click Done with Donations and proceed through the screens until you get to the screen that tells you that TurboTax has added in the contribution.
The contribution will be back on Form 1040 line 10b, but it won't be flagged as an error. It only gets flagged if you enter it when prompted after you finish Deductions & Credits and the software tells you that you are getting the standard deduction. It will not get flagged if you enter it in Donations to Charity.
