Providing Documentation to Donors

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.

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