PTA members and contributors often assume any payment they make to a PTA in conjunction with a fundraising event is tax deductible. However, rules and limitations exist for the deductibility of such payments.
State and federal law requires that tax-exempt charitable organizations provide donors with receipts or other forms of documentation of contributions for a cash donation. Failure to comply may result in denial of deductions for donors and the imposition of penalties on the organization.
Tax laws require the donor to obtain a receipt for every cash donation regardless of the amount. A donor must have a canceled check, bank record or receipt that shows the name of the PTA to which the contribution was made, the date and the amount of the contribution; therefore PTAs must give a receipt for every cash donation.
In-kind contributions of $250 or more require written acknowledgment from the PTA that lists the items donated and includes the PTA’s Employer Identification Number.
Upon receiving a quid pro quo contribution of $75 or more, PTAs must provide written acknowledgment that quantifies the value of the donation (cash-equivalent) and documents how the donation was received (cash, goods or services).
In all cases, be sure to thank the donor for her/his generous support (Donation Receipt).
Quid Pro Quo Contributions
Payments made partly as a contribution and partly for goods and services provided to the donor from the charity are known as quid pro quo contributions. For example, when a donor pays $100 for a concert ticket that would normally be valued at $40, $60 would be tax deductible. The quid pro quo contribution is the total amount paid, not the deductible amount. Therefore, in this case, because the donor paid $100, a disclosure statement must be provided.
In the case of a large cash donation or an endowment, an association should contact district PTA or the State PTA office for guidance.
Donations of property such as vehicles and stock (except for publicly traded securities) that can be sold and are valued in excess of $500.00 may need to file a form 8282 depending on how the value was determined. This only applies if the property is sold within 3 years of the donation but requires the donor to fill out part of the form. Since the donor may not be available in 2-3 years, it is good practice to have them fill out the form just in case you may sell it during that time frame.
Non-cash donations in excess of $5000.00 require a form 8283 to be filled out and given to the donor for their taxes. They also (except for publicly traded securities) must be appraised by an outside qualified appraiser.
See IRS information about non-cash donations at: https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-organizations-substantiating-noncash-contributions
