The first Sunday in January often presents problems for church treasurers regarding the correct receipting of charitable contributions. For example, the first Sunday in January of 1996 falls on January 7th. Can a member who contributes a personal check to your church on Sunday, January 7th, deduct the check on his or her 1995 federal tax return if the check is backdated to read “December 31, 1995”? Many churches advise their congregations during worship services conducted on the first Sunday in January that checks contributed on that day can be credited to the previous year if they are dated December 31st of the previous year. Is this true? Unfortunately, the answer is no. The income tax regulations specify that “ordinarily, a contribution is made at the time delivery is effected. The unconditional delivery or mailing of a check which subsequently clears in due course will constitute an effective contribution on the date of delivery or mailing.” According to this language, a check dated December 31, 1995 but physically delivered in January of 1996 is deductible only on the donor’s 1996 federal tax return. This is so whether a donor “predated” a check to read “December 31, 1995” during church services conducted in January of 1996, or in fact completed and dated the check on December 31, 1995 but deposited it on or after January 1, 1996. The only exception to this rule is in the case of a check that is dated and mailed (and postmarked) in December of 1995. The fact that the church does not receive the check until January of 1996 does not prevent the donor from deducting it on his or her 1995 federal tax return. The rules are summarized in the table accompanying this article.
|Checks written in December 1995 and deposited in church offering in January 1996.||X|
|Checks written and deposited in church offering in January 1996 but “back dated” to December 1995.||X|
|Checks written and deposited in church offering in December 1995 but “post dated” to January 1996.||X|
|Checks written in December 1995 and deposited in the mail and postmarked in December 1995, but not received by the church until January 1996.||X|
|Checks written in December 1995 and deposited in the mail in December 1995 but not postmarked until January 1996, and not received by the church until January 1996.||X|
This article originally appeared in Church Treasurer Alert, December 1995.