A new tax incentive may give disaster relief funds a huge boost to certain donations from corporations. In 2020, the Consolidated Appropriations Act (CAA) established a new category of “qualified disaster relief contributions.”
Under the CAA, corporations can deduct up to 100% of their taxable income for contributions to qualified disaster areas. Qualified disasters are those which occurred after Dec. 27, 2019, and before Dec. 27, 2020, as specified by the Federal Emergency Management Agency.
A major disaster declaration for the area must be made by the President, during the period of Jan. 1, 2020, through Feb. 25, 2021, and corporate contributions must be paid in cash during that same period.