United Way of Central and Northeastern Connecticut will send gift confirmations/receipts, which contain all relevant gift information, to all donors for gifts made or pledged through the United Way Campaign. In accordance with IRS requirements, we will acknowledge that United Way of Central and Northeastern Connecticut does not provide any goods or services in consideration, in whole or part, for a gift/pledge. United Way suggests all donors consult with a tax advisor in regards to their personal tax situation.
Changes in Tax Law May Affect Your Gift
What you should know about IRS Notice 2006-110 “Recordkeeping Requirements for Charitable Contributions made by Payroll Deduction” and the Pension Protection Act of 2006 (effective August 17, 2006):
- If employees contribute to charity through payroll deduction, they must have a pay stub, W-2 or other employer document showing the total amount withheld for the charitable organization AND a donor pledge card or pledge confirmation (the original, a carbon copy or a photocopy of a paper form, or a printout of an online donation) from the charity confirming their pledge. This is needed to substantiate and claim a tax deduction.
- If employees make a charitable contribution by check or credit card, they must have either a bank record (cancelled check made payable to the charity or bank statement with the transaction) OR written acknowledgement from a charitable organization showing the date, amount contributed and name of the organization.
- If employees make a charitable contribution by cash, they must have a written acknowledgement showing the date, amount contributed and name of the organization. This may be generated by the employer or United Way.
- If employees make a charitable contribution by stock transfer, they must have a written acknowledgement from United Way showing the date and amount contributed.
Under the old law, donors could use “other reliable written records” to substantiate charitable contributions for tax purposes. The difference now is that the IRS is specific about what official documents will be accepted as proof of charitable contributions, which may lead to increased enforcement by tax preparers and auditors. Consult your tax advisor for more information.
For more information, see IR-2006-186, “New Guidelines for Payroll Deduction Contributions to Charities.”