Are Donation Processing Fees Tax Deductible?

Givers can deduct charitable gifts to churches, but you may occasionally be asked if they can also deduct the donation processing fees.

The simple rule for individuals says YES … that is, if a giver received no goods or services in return. 100% of the amount they give as a gift, including donation processing fees, is tax deductible. Givers can report the gift amount plus the fees on your tax return. They should also see this total amount (gift + fees) on your gift acknowledgements, receipts, and giving statements. (Giving systems vary.)

But what if they’re registering for a retreat and the event fee includes the cost of a $10 book and lodging? The book and lodgings represent a tangible return on your gift. So the cost of those items – and the associated donation processing fees – are not tax deductible.

We advise givers to make sure they understand these charitable contributions guidelines.
 

DO GIVERS HAVE TO PAY DONATION PROCESSING FEES?

When giving to a church or charitable organization, the donation processing fees are NOT the giver’s, responsibility. However, many online giving platforms now allow churches to enable givers to OPT IN to pay the donation processing fee. The giving form should display a checkbox that says, “Yes, I will pay the donation processing fee.” The exact amount of the fee and the donation total should be displayed.

No organization should apply donation fees to a giver without their knowledge, or ask them on the giving form to OPT OUT of paying the fees. It should always be an OPT IN request.

VISION2 online giving for churches allows givers to opt in to pay the donation processing fees if they wish.

Reach out today to learn more about Vision2.

RELATED: Navigating the “High” Cost of Online Giving