TRIDENT UNITED WAY TAX RECEIPT INFORMATION
Trident United Way issues tax receipts quarterly, with full detail of the previous year gifts in January.
Frequently Asked Questions
1. What qualifies as a “cash” contribution?
Cash contributions are defined as those paid by cash, check, electronic funds transfer or credit card.
2. How will Trident United Way handle receipting for “cash” contributions?
A quarterly summary, as well as an annual summary, will be issued to the donor if at least one contribution was $250 or more during the year. Separate contributions of less than $250 are not required to be aggregated; therefore, Trident United Way does not issue tax receipts for any contribution less than $250, no matter how many times the donor contributes during the year.
Note: At times, donors may pay their pledge via a third party processor (TPP). In these instances, it is important to confirm whether the TPP or Trident United Way is responsible for tax receipt issuance.
Donors may gift from a donor-advised fund. It is important to note that Trident United Way will not send a tax receipt to the donor for such gifts, as the donor has already received the tax benefit when the gift was made to the gift fund.
Donors may also gift from an Individual Retirement Account (IRA) and will receive a gift acknowledgment letter.
Payroll Deduction Contributions
3. What is a payroll deduction pledge/gift?
A payroll deduction pledge/gift is a charitable contribution made by an employee of a company that will be deducted from the employee’s paycheck at a later date. Deductions may be one time or over multiple pay periods. A formal tax receipt will be provided for any single payroll contribution of $250 or more.
4. What information will Trident United Way and employers provide to the donor to substantiate gifts via payroll deduction?
For charitable contributions made by payroll deduction, the IRS may require the donor to have one or more of the following documents:
a) A pay stub, Form W-2, or other document furnished by the employer that indicates the amount withheld during the tax year for payment to Trident United Way,
b) A pledge form or other document prepared by, or at the direction of, Trident United Way that shows the Trident United Way name, the date of the pledge and the amount of the pledge. Charitable organizations are not required to substantiate designations for payroll deduction pledges according to the IRS.
c) Other employer-furnished document that shows the amount withheld and paid to Trident United Way.
5. In which year is a payroll deduction gift tax deductible?
The year when the contribution is deducted from the employee’s paycheck is the tax year in which the employee may claim the tax deduction.
Note: It is important to clarify that the pledge form donors need to substantiate their gift often relates to a prior campaign as many gifts (particularly payroll deduction) are not pledged and paid in the same year. For example, a payroll deduction donor would need a copy of their fall 2018 pledge form to substantiate payments made during calendar year 2019.
6. What can the workplace do to ensure payroll contributions are deductible for donors?
1. Donors are encouraged to:
• Retain a copy of your pledge form to substantiate your charitable contribution.
- OR -
• Request a copy of their pledge form from your payroll office.
2. Payroll contacts are encouraged to:
• Retain employee pledge forms or electronic files as long as necessary, as employees may submit tax returns well after the April 15 tax filing deadline.
3. Employee workplace campaign coordinators are encouraged to:
• Be aware of how the substantiation requirements affect donors at their company. Additionally, the campaign coordinator should identify a contact to which questions can be directed as they arise.
• Include tax substantiation information on any online giving tool. Include verbiage on confirmation emails advising employees to print and retain to substantiate gifts for tax purposes.
Where can I find more information about the IRS Charitable Contribution requirements?
This publication explains the federal tax law for 501(c)(3) nonprofit organizations that receive tax-deductible charitable contributions and for taxpayers who make contributions to such organizations. Please note the substantiation requirements only impact donors who itemize deductions on their tax return.
If you have additional questions, please contact your Trident United Way Relationship Manager or CFO by calling (843) 740-9000 or firstname.lastname@example.org