Are Charitable Contributions Tax-Deductible for Corporations?

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Making donations to a charitable organization on behalf of your corporation is both goodwill and good for your income tax return. If you own an S corporation, the charitable contributions you make in the name of your company can be claimed on your individual income tax return. C corporation owners claim charitable deductions on the corporation's tax return. To claim charity-related tax deductions, the donations must meet specific Internal Revenue Service rules.

Qualified Organizations

To claim tax deductions for donations your corporation makes to charities, you must donate cash or goods to specific types of allowed charities and organizations. Organizations that the IRS allows you to take deductions for donating to include religious organizations; a state or territory of the United States; a war veteran's trust, fund, post or foundation; and a community trust or foundation.

Donation Timing

Regardless of whether your corporation uses the cash or accrual method of accounting, you can claim tax deductions for only charitable donations that you make by the end of the tax year you're claiming the deduction for.

Deductible Value

When you donate physical items to a charity, you can claim the fair and current market value for that donation only. When you donate cash, you can claim the actual cash amount of the donation.

Deduction Limits

You can deduct up to 50 percent of your charitable donation in most cases. If you donate to certain veterans organizations, private foundations or cemetery or fraternal organizations, you are allowed to deduct only up to 30 percent. Consult with a licensed tax adviser to determine the full tax deduction you can take for your corporation's specific charitable contributions.

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