We recently fielded this question from a church administrator in Virginia:
Is there a minimum gift amount for which a contribution statement must be issued? For instance, if someone visited the church one Sunday and dropped a $10 check in the offering plate, is the church obligated to send a statement?
Churches typically face this question in January, but also may encounter it throughout the year if they issue regular quarterly giving statements.
No law requires the church to issue the donor a receipt. The receipt is issued as a courtesy to the donor to allow them to deduct their contributions. Churches should also be aware that due to changes in tax law there is no longer an incentive for the vast majority of donors to itemize deductions.
If the church issues a receipt, it should meet all the tax requirements to allow the donor to deduct the contribution. We did some research on this administrator's question. Attorney Frank Sommerville, an editorial advisor for Church Law & Tax, provides this response:
[Based on this question] since the donation is less than $250, no receipt is required from the church for the donor to deduct the contribution. The cancelled check is adequate.
Richard Hammar further explains what donors need in order to deduct contributions of any size on their taxes in Chapter 8 of his annual Church & Clergy Tax Guide:
Donors cannot deduct a cash contribution to a church or charity, regardless of the amount, unless they keep one of the following:
* a bank record (a statement from a financial institution, an electronic fund transfer receipt, a canceled check, a scanned image of both sides of a canceled check obtained from a bank website, or a credit card statement) showing the charity's name, date of the contribution, and the amount of the contribution;
* a written communication (including "electronic mail correspondence") from the charity [a communication that must include specific information about the donation and the charity].
The substantiation requirements may not be satisfied by maintaining other reliable records.
Like Sommerville, Hammar cautions churches to provide charitable contributions statements that meet substantiation requirements for all contributions of $250 or more. Very specific information must be included on charitable contributions statements in order to make them valid for donors to use for tax-deduction purposes. Learn more about the specific information to include in the annual Church & Clergy Tax Guide.
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