Contribution Credits
Title: Contribution Credits
Category: Church Policy Issues
Subject: Contribution Credit
Contribution Credits
This information was not authored by the Editor, rather the Editor serves as a contact person. This information was provided by the office of Keith Hamilton of the Georgia Baptist Convention.
Current laws regarding legal contributions are covered here.
Six Conditions for Deductible Charitable Contribution (IRS Pub. 526 www.irs.gov )
1. A gift of money or property - This would include cash, checks, real estate, stocks, building materials, life insurance policies, and so forth.
2. Made before the close of the tax year for which contribution is claimed - As a general rule, a contribution is made at the time of delivery. However, a contribution mailed is considered delivered when it is mailed.
3. Voluntary and made without getting, or expecting to get, anything of equal value - The donation made should be given as an unconditional transfer without personal benefit to the donor. The donation may be undesignated or designated according to the policies of the church.
4. Made "to or for the use of" a qualified organization - The church must exercise control over the donation. It cannot simply be "passed through" to an individual or ministry. The church must have the authority to accept or reject the donation given.
5. Not in excess of the amounts allowed by law - There are federal limits to the dollar amount an individual can deduct on their personal income tax returns.
6. Subject to written substantiation - Depending on the amount of the contribution, the donor must be ready to substantiate the contribution to the state or federal government. The burden of proof is on the individual, not the church.
Charitable Contributions NOT Deductible (IRS Pub. 526 www.irs.gov)
1. Contributions made to a specific individual* - As a general rule, contributions to individuals are not deductible. A gift designated to the church for a specific person that has a benevolence need is not deductible. However, a gift to the church for the benevolence fund is generally deductible. *If the individual is a church employee, under very limited circumstances, a contribution may be deductible only if the church employee's W-2 reflects the contribution given to the church by the donor. See The Church and Clergy Tax Guide for specific guidelines.
2. Contributions to a non-qualified organization - Churches that are members of the Georgia Baptist Convention are considered qualified organization. A group 501(c)(3) letter from the Georgia Baptist Convention is available by calling Church Financial Services. (770) 936-5295 or www.gabaptist.org
3. Portion of contribution for which you receive or expect to receive an equal financial/economic benefit - Only the portion of the contribution that is without benefit other than a spiritual benefit is deductible by the donor.
4. The value of your time or services - A church should never give a contribution credit for anyone donating their labor to the church. This includes businesses giving a church a reduced billing for services (like electrical, plumbing, lawn, and so forth) they performed at the church in turn the church is asked to give the business a contribution credit for the difference between the reduced billing and normal billing. A church should not participate in this practice.
5. Personal, living, or family expenses - A contribution cannot be deductible if it benefits personal or family members.
6. Certain contributions of partial interests in property - The donation must be irrevocable by the donor.
This document is intended to provide churches, pastors, and staff with current and accurate information about the subjects covered. However, such information is not intended to be sufficient for dealing with a particular legal problem, and the authors and distributors do not warrant or represent its suitability for such purpose. The reader should not rely upon this document as a substitute for independent legal consultation. For more information on this subject and other tax matters, contact Church Ministry Resources 1.800.222.1840 and order The Church & Clergy Tax Guide.
This information was not authored by the Editor, rather the Editor serves as a contact person. This information was provided by the office of Keith Hamilton of the Georgia Baptist Convention.
Current laws regarding legal contributions are covered here.
Six Conditions for Deductible Charitable Contribution (IRS Pub. 526 www.irs.gov )
1. A gift of money or property - This would include cash, checks, real estate, stocks, building materials, life insurance policies, and so forth.
2. Made before the close of the tax year for which contribution is claimed - As a general rule, a contribution is made at the time of delivery. However, a contribution mailed is considered delivered when it is mailed.
3. Voluntary and made without getting, or expecting to get, anything of equal value - The donation made should be given as an unconditional transfer without personal benefit to the donor. The donation may be undesignated or designated according to the policies of the church.
4. Made "to or for the use of" a qualified organization - The church must exercise control over the donation. It cannot simply be "passed through" to an individual or ministry. The church must have the authority to accept or reject the donation given.
5. Not in excess of the amounts allowed by law - There are federal limits to the dollar amount an individual can deduct on their personal income tax returns.
6. Subject to written substantiation - Depending on the amount of the contribution, the donor must be ready to substantiate the contribution to the state or federal government. The burden of proof is on the individual, not the church.
Charitable Contributions NOT Deductible (IRS Pub. 526 www.irs.gov)
1. Contributions made to a specific individual* - As a general rule, contributions to individuals are not deductible. A gift designated to the church for a specific person that has a benevolence need is not deductible. However, a gift to the church for the benevolence fund is generally deductible. *If the individual is a church employee, under very limited circumstances, a contribution may be deductible only if the church employee's W-2 reflects the contribution given to the church by the donor. See The Church and Clergy Tax Guide for specific guidelines.
2. Contributions to a non-qualified organization - Churches that are members of the Georgia Baptist Convention are considered qualified organization. A group 501(c)(3) letter from the Georgia Baptist Convention is available by calling Church Financial Services. (770) 936-5295 or www.gabaptist.org
3. Portion of contribution for which you receive or expect to receive an equal financial/economic benefit - Only the portion of the contribution that is without benefit other than a spiritual benefit is deductible by the donor.
4. The value of your time or services - A church should never give a contribution credit for anyone donating their labor to the church. This includes businesses giving a church a reduced billing for services (like electrical, plumbing, lawn, and so forth) they performed at the church in turn the church is asked to give the business a contribution credit for the difference between the reduced billing and normal billing. A church should not participate in this practice.
5. Personal, living, or family expenses - A contribution cannot be deductible if it benefits personal or family members.
6. Certain contributions of partial interests in property - The donation must be irrevocable by the donor.
This document is intended to provide churches, pastors, and staff with current and accurate information about the subjects covered. However, such information is not intended to be sufficient for dealing with a particular legal problem, and the authors and distributors do not warrant or represent its suitability for such purpose. The reader should not rely upon this document as a substitute for independent legal consultation. For more information on this subject and other tax matters, contact Church Ministry Resources 1.800.222.1840 and order The Church & Clergy Tax Guide.
