Last Reviewed/Updated 1/25/10

Pursuant to the federal Pension Protection Act of 2006, taxpayers claiming charitable contribution deductions for cash, check, or other monetary gifts must adhere to expanded recordkeeping requirements in order to claim a deduction for the gift.

To substantiate a deduction for contributions of any amount, a taxpayer must maintain a bank record or a written communication from the charity showing the name of the organization, the date of the contribution, and the amount of the contribution. For a charitable contribution made by payroll deduction, a pay stub, Form W-2, or other employer-furnished document that sets forth the amount withheld for payment to the organization, along with a pledge card prepared by or at the direction of the donee organization, will be deemed to be a "written communication from the donee organization" that satisfies the requirements (see below for information about payroll deductions of $250 or more).

Additional substantiation requirements remain in effect for contributions of $250 or more, whether made directly or through payroll deduction. For any contribution of $250 or more, in order for a donor to be able to claim a charitable deduction, s/he must written acknowledgment of the contribution from the donee organization which includes the amount of cash and a description of any property other than cash contributed; a statement whether the organization provided any goods or services in consideration for the contribution; and a description and good faith estimate of the value of any goods or services provided in consideration for the contribution, or, if the goods or services consist solely of intangible religious benefits, a statement to that effect. This acknowledgment from the charity must be "contemporaneous" - obtained by the donor no later than the date the donor actually files his/her tax return for the year in which the donation was made.

To substantiate a contribution of $250 or more made by payroll deduction, the pledge card or other document prepared by the donee organization also must include a statement to the effect that the organization does not provide goods or services in whole or partial consideration for any contributions made to the organization by payroll deduction. IRS guidelines state that the contribution amount withheld from each payment of wages to a taxpayer is treated as a separate contribution for purposes of applying the $250 threshold in § 170(f)(8) to charitable contributions made by payroll deduction; in other words, 10 payroll deductions of $25 each, totaling $250 over the year, do not trigger the extra substantiation requirement.

More information is available on the IRS Web site at www.irs.gov/charities/article/0,,id=96102,00.html.