Can an s corporation deduct charitable contributions?

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Casey Epton, CPA, is a Senior Tax Advisor at Deduction, where he helped design Taylor, CPAI from day one, building an AI tax agent that works seamlessly for both clients and the CPAs who verify every return.

Last updated:

Sep 2026

An S corporation cannot deduct charitable contributions at the corporate level. Contributions are passed through to shareholders, who claim the deduction on their individual returns.

How It Works

S corp reports charitable contributions on Schedule K (Form 1120-S), Line 12a
Each shareholder receives their pro rata share on Schedule K-1, Box 12 (Codes A–G)
Shareholders deduct contributions on Schedule A (Form 1040) if they itemize

AGI Limitations

Code	Type of Contribution	AGI Limit
A	Cash to public charities	60%
B	Cash to certain private foundations	30%
C	Noncash property (50% limit orgs)	50%
D	Noncash property (30% limit orgs)	30%
E	Capital gain property to 50% orgs	30%
F	Capital gain property to certain orgs	20%
G	Qualified conservation contributions	100% (farmers/ranchers) or 50%

Key Points

Basis limitation: Shareholders can only deduct contributions to the extent of their stock basis. Excess carries forward indefinitely.
Stock basis reduction: Charitable contributions reduce shareholder basis by the adjusted basis of property donated (not FMV), even though deduction may be based on FMV.
Non-itemizers get no benefit: If a shareholder takes the standard deduction, the passed-through contribution provides no tax benefit.
Noncash contributions >$500: Shareholders must file Form 8283 with their return.

The New "0.5% AGI Floor" for 2026

Starting in 2026, you can only deduct charitable contributions (including those passed through from an S-Corp) to the extent they exceed 0.5% of your Adjusted Gross Income (AGI).

Example: If your AGI is $200,000, the first $1,000 of your total charitable giving is "non-deductible." Only amounts above that $1,000 provide a tax benefit.

Even if you take the Standard Deduction, you can now take an "above-the-line" deduction for cash contributions.

Limits: Up to $1,000 for single filers or $2,000 for married couples filing jointly.

Note: This applies only to cash contributions (Schedule K-1, Box 12, Code A). Non-cash property passed through from the S-Corp still requires itemizing to get a benefit.

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