WASHINGTON — Taxpayers who make cash contributions on or before April 15 to charities providing relief for the families of two slain New York City police officers can receive an immediate tax benefit by choosing to claim a charitable contribution deduction on their 2014 federal income tax returns, according to the Internal Revenue Service.
Under special legislation enacted this week, taxpayers can choose to treat certain contributions made on or after Jan. 1, 2015 and before midnight on Wednesday, April 15, 2015, as if made on Dec. 31, 2014. This special provision only applies to cash contributions to charities to provide assistance to the families of New York Police Department Detectives Wenjian Liu and Rafael Ramos.
Ordinarily, charitable contribution deductions may only be claimed in the year in which the contribution is made. Under the special provision, deductions for contributions to assist the police officers’ families made on or after Jan. 1, 2015 and on or before April 15, 2015 may be claimed on either a 2014 or 2015 return, but not both. Deductions for contributions made before Jan. 1, 2015 may only be claimed on a 2014 return. Similarly, deductions for contributions made after April 15, 2015 may only be claimed on a 2015 return.
Only individuals who itemize their deductions on Schedule A are eligible to take a charitable contribution deduction for these contributions. Those who claim the standard deduction, including all short-form filers, are not eligible.
The Slain Officer Family Support Act of 2015, enacted April 1, does not apply to contributions of property. In addition, gifts made directly to any individual are not tax-deductible. (Although charities generally cannot accept and distribute donations earmarked for particular individuals, another provision of the special legislation generally allows charities to do so in this case if the funds are distributed to the officers’ families on or before Oct. 15, 2015.)
Contributions made by text message, check, credit card, debit card, electronic funds transfer or using PayPal qualify as cash donations for purposes of this special deduction rule. Donations charged to a credit card before midnight on April 15, 2015 are eligible contributions even if the credit card bill isn’t paid until after that date. Also, donations made by check are eligible if they are mailed by April 15.
Taxpayers should be sure their contributions go to charities. Most organizations eligible to receive tax-deductible donations are listed in a searchable online database available on IRS.gov under Exempt Organizations Select Check. Some organizations, such as churches or governments, may be eligible even though they are not listed on IRS.gov.
Federal law requires that taxpayers keep a record of any deductible donations they make. For donations by text message, a telephone bill will meet the recordkeeping requirement if it shows the name of the charity, the date of the contribution and the amount of the contribution. For cash contributions made by other means, be sure to keep a bank record, such as a cancelled check, or a receipt from the charity showing the name of the charity and the date and amount of the contribution. In addition, for donations of $250 or more, taxpayers must obtain a written acknowledgment from the charity before filing a return.
IRS Publication 526 has further details on making gifts to charity, including the recordkeeping rules for cash contributions.
Congress also provided accelerated deduction provisions following the 2013 typhoon in the Philippines and the 2010 earthquake in Haiti.