What Are the Section 170(f)(8) Requirements?
Learn what specific documentation the IRS requires for charitable gifts of $250 or more to ensure your generosity qualifies for a tax deduction.
To claim a tax deduction for a charitable donation, the Internal Revenue Service (IRS) requires donors to provide proof of their contribution. The type of documentation needed depends on the nature and amount of the gift. While small donations have simpler record-keeping rules, more significant contributions are subject to stricter substantiation requirements to be considered deductible.
The $250 Substantiation Rule
The rules for substantiating larger donations are found in Internal Revenue Code Section 170. This section states that no deduction is allowed for any single contribution of $250 or more unless the taxpayer has a “contemporaneous written acknowledgment” (CWA) from the charity. Separate payments are not added together to meet the $250 threshold; each is considered independently.
The responsibility for obtaining this acknowledgment rests with the donor, not the charity. For donations at this level, proof like a canceled check or credit card statement is not sufficient by itself. A taxpayer must have the CWA before filing their tax return for the year of the donation, otherwise the IRS can disallow the deduction even if the contribution was legitimately made.
Required Content for the Written Acknowledgment
For a written acknowledgment to be valid, it must contain several pieces of information. The IRS does not mandate a particular format, so the document can be a letter, postcard, or email, but its content is strictly defined. The acknowledgment must state the name of the charitable organization.
If the contribution was made in cash, the acknowledgment must state the amount. For contributions of property, the charity’s acknowledgment must include a description of the non-cash property in reasonable detail. The charity should not include a value for the property, as the task of determining the fair market value falls to the donor.
The acknowledgment must also include a statement regarding whether the donor received any goods or services in return for their contribution. If the charity provides nothing of value, the acknowledgment must include a clear statement to that effect.
In a “quid pro quo” situation, a donor receives a benefit in exchange for their contribution, such as attending a fundraising dinner. In these cases, the acknowledgment must provide a description and a good-faith estimate of the value of the goods or services the charity provided. The donor’s deductible amount is then limited to the amount of their contribution that exceeds the value of the benefit they received.
Timing and Special Contribution Scenarios
The term “contemporaneous” means a donor must receive the acknowledgment from the charity by the earlier of two dates: the date the taxpayer files their income tax return for the year of the gift, or the due date for filing that return, including extensions. For most individuals, this means having the document by April 15th of the following year, or by October 15th if an extension is filed.
Payroll Deductions
For charitable contributions made through payroll deductions, the IRS considers each deduction a separate gift. If no single deduction is $250 or more, a CWA is not required. Instead, the donor can use a pay stub, Form W-2, or another employer document showing the amount withheld for the charity, combined with a pledge card from the organization. This pledge card must include a statement that the charity provided no goods or services in return.
Unreimbursed Expenses
The substantiation rules also extend to unreimbursed out-of-pocket expenses incurred while performing services for a charity. If a volunteer has a single out-of-pocket expense of $250 or more, a written acknowledgment is required. While the value of a volunteer’s time is not deductible, costs for supplies or transportation are. Volunteers may deduct the cost of using their car by taking the standard mileage rate for charitable activities—which is 14 cents per mile—or by deducting their actual expenses for gas and oil.
To deduct these unreimbursed expenses, the volunteer needs a written acknowledgment from the charity that describes the services they provided. This document must also include the standard statement confirming whether any goods or services were provided to the volunteer.