Sean McNeil, CPA
Accounting & Auditing Manager

Voters approved charitable giving tax deduction 23 years ago

Massachusetts has revived the charitable giving tax deduction for state income tax filers for the 2023 tax year, so taxpayers will have an additional tax break when they file their returns next year. And the commonwealth’s nonprofits are happy about the prospect that it may encourage more charitable giving.

The charitable deduction can be taken against Part B taxable income, which includes wages, pensions, business and rental income. Part-year residents may take the deduction, but it must be prorated based on the number of days they were in Massachusetts for the calendar year.

Massachusetts ballot initiative approved in 2000

Massachusetts voters approved a ballot initiative in 2000 creating the charitable deduction with 67% approval, but the legislature suspended the tax break due to budget shortfalls. Implementation was first approved for the 2021 tax year but was delayed due to the Covid-19 pandemic and was recently delayed for yet one more year. So, it is effective for the 2023 tax year.

Massachusetts brings to 28 the number of states that provide some form of state tax incentive for charitable giving.

Taxpayers should keep documentation of all charitable gifts made in 2023 to support the charitable giving deduction when filing state income tax returns next year.

The new charitable deduction is universal, meaning it is available to all Massachusetts individual taxpayers.

For more information about tax incentives for charitable giving, contact your G.T. Reilly advisor.