When a charitable contribution is made by an S corporation, the right to claim the charitable deduction passes through to the S corporation shareholders.  This is significant because charitable deductions claimed by a corporation (that is, a C corporation) is limited to 10% of their annual net income (with carryover for up to 5 years).  On the other hand, the charitable deduction claimed by an individual–including an S corporation shareholder–is limited to 50%, 30% or 20%of the individuals net income (depending on the type of charity and the type of contribution). 

However, according to Revenue Ruling 2000-43, S corporation shareholders may only claim the charitable deduction when the contribution is actually made.  In contrast, accrual-basis C corporations may claim a charitable deduction for the year in which the contribution is authorized, even if it is not actually made until the next year.