Is a Church Offering Tax Deductible?

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A church offering is usually tax-deductible, if  you can furnish proof.
A church offering is usually tax-deductible, if you can furnish proof. (Image: Steve Allen/Photodisc/Getty Images)

Generally, financial contributions to nonprofit organizations can be deducted at tax time, creating an incentive for people to give to charity. This includes money you put in the donation basket at church every week. While church offerings can be tax-deductible, the Internal Revenue Service doesn’t make it very easy to claim them.

Definition

A tax-deductible item is one which you claim on your taxes and get a portion back in the form of reduced tax liability. A church offering is any contribution made to a religious organization, whether it’s a one-time donation during a fund-raising event or weekly contributions given at a mass or service.

Exempt Status

Most religious institutions are 501(c)(3) organizations. This is an IRS designation that makes them tax-exempt and allows you to claim donations to them on your taxes. However, if you attend a newly formed or very small church, it may not yet have gotten its 501(c)(3) designation, in which case your offerings can’t be deducted at tax time.

Receipts

People often place cash or coins in collection plates. However, unless you get a receipt for your contribution, it’s not tax-deductible. According to the Pension Protection Act passed in 2006, you must be able to furnish a receipt as proof of your donation for it to be deductible. A copy of the check is not considered proof. While you can try to claim a donation for which you don’t have a receipt, if you get audited, you may find yourself in trouble.

Problem

Unfortunately, it’s just not logical for someone to be frantically writing receipts for every offering made during a church service. For this reason, people who previously made regular offerings may be dissuaded from giving under the current IRS rules. Previously, people needed to show proof of a contribution only if they gave $250 or more at one time.

Solutions

Some churches have installed machines similar to ATMs that collect offerings and give receipts, according to a 2007 Free Republic article. Others are encouraging people to make monthly or yearly donations via credit card instead. Yet other churches are providing regular churchgoers with personalized envelopes. Each envelope bears the churchgoer's name and an ID number. Donors put their offerings inside the envelopes and hand them in at collection time. A church bookkeeper then enters the amounts in a database to provide donors with statements at the end of the year.

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