If you’re like me, you’re self-quarantining – perhaps with your family – in your home in response to coronavirus. It’s a weird new normal. And for many, it’s an anxious time. But as we worry about the health – physical and financial – of our friends and family, most of us want to know: How can we help?
COVID-19 is the official name for the infectious disease caused by the most recently discovered coronavirus. According to Johns Hopkins, as of March 21, 2020, there are 286,816 confirmed cases of COVID-19 in 167 territories and countries. The United States has 19,624 confirmed cases.
The federal government is offering some relief. For starters, the Internal Revenue Service (IRS) has extended filing and payment due dates to July 15, 2020. Many states have also extended due dates and other relief. Congress has also passed relief packages and has promised more (including stimulus checks).
But we know that likely isn’t enough. You may also want to help. And some times, that can result in a tax break. But some of the tax rules are good to know, even if you’re not claiming a deduction. Here are a few tips to keep in mind:
- Cash is king. For many organizations, cash, or cash equivalent, is preferred. Keep receipts if you intend to claim those donations on your tax return.
- Stay put. Yes, we all want to help, but many states have restrictions on travel, and the federal government has asked that we stay at home when possible. Ask first. If your volunteer services are needed, remember that you can claim a tax deduction for out-of-pocket expenses but not for your time.
- Be smart. Be wary of personal solicitations. Make sure that gifts made by checks or credit card gifts are secure. And don’t send money by text or apps like Venmo without verifying the organization and contact info. Keep excellent records for tax purposes – and having the information available is handy if you want to follow up with another donation.
- Do your homework. Check credentials of a potential charitable organization before you donate. Charity Navigator is useful for gathering information about existing charities and has published a Coronavirus Hot Topic, featuring organizations that are responding to COVID-19.
- Confirm charitable status. If the tax deduction matters to you, make sure that your donation goes to a qualified charitable organization. You can search using IRS’ Tax Exempt Organization Search (formerly Select Check).
- Check with the organization first. Wish lists may change as needs are assessed, and storage may be limited. Check with the organization before you send or drop off anything. And if you’re planning to claim a tax deduction for any in-kind goods, be sure to keep receipts showing what you paid for the items.
- Use caution when donating to individuals. For tax purposes, you can only deduct contributions to qualified charitable organizations. Donations to individuals are never deductible for tax purposes, even if those folks are deserving. But there’s a non-tax reason to use caution: money solicited for individuals could be part of a scam, and you have no control over how it might be used. For more, the Federal Trade Commission has a tip sheet on how to avoid scams.
- Rely on oldies but goodies. There’s nothing wrong with new charitable organizations, but there is something to be said for those that have been around, like the Red Cross. Brand new organizations may not have the facilities in place to offer the most effective relief – or they could be scams.
- Pay attention to the rules. The rules for charitable giving apply even in extraordinary situations. However, sometimes those rules may be tweaked to allow for more generosity, so check with reliable sources for updates.
For more tips on making your charitable donations count for tax purposes, click here.
If you want to help but aren’t sure where to start, some tax-exempt charities that are accepting Coronavirus relief donations include:
- American Red Cross. To make a financial donation, visit their website or call 1.800.RED CROSS.
- Boys & Girls Clubs of America is helping feed kids participating in its clubs and is providing virtual academic support. You can donate here.
- The CDC Foundation supports the Centers for Disease Control and Prevention. You can donate here.
- In the US, Direct Relief is delivering protective masks – along with exam gloves and isolation gowns – to health care organizations in areas with confirmed COVID-19 cases. You can donate here.
- Donors Choose. With schools closed across the country, teachers need supplies for students at home to keep them learning. Here’s how you can help.
- Feeding America supports hunger relief efforts through food banks and food pantries. To make a donation, visit their website.
- First Book is working on getting 7 million books to kids in need, who don’t have home libraries or Internet access for home learning. You can help here: firstbook.org/cv
- Give Directly is delivering cash to families impacted by COVID-19 in the US. You can donate through their website.
- Meals On Wheels deliver meals to keep seniors safe amid COVID-19. You can donate through their website.
- Salvation Army. To donate, visit www.helpsalvationarmy.org.
- Save the Children has a response to schools shutting down due to the coronavirus pandemic. To help fill minds and bellies, visit their website.
- United Way has established a COVID-19 Community Response and Recovery Fund. To give, visit their website.
(Please note that these are not endorsements. If you’re not a fan of these organizations, many other charities will welcome your support.)
Corporate donor sites and giving challenges include:
- Citi Foundation is donating $5 million to help No Kid Hungry feed children who are missing out on school lunches. Citi will match donations up to $2 million: you can give here.
- GoFundMe has created a landing page that aggregates the campaigns to help those affected by the coronavirus.
In addition to financial donations, what else can you do?
- The Red Cross reports there is a severe blood shortage due to blood drive cancellations. Healthy individuals are needed to donate. You can’t claim a tax deduction for giving blood, but it sure is a terrific way to help. Find your nearest Red Cross donation center by entering your zip code here.
- If you’re able to write a handwritten note to send to those who are on the front lines, including hospitals, police and fire departments, to offer your good wishes, it is typically appreciated (but ask first since). No tax consequences, just warm fuzzies.
And a few more tips:
- Be generous to those who are delivering your food, etc. You can easily help out folks who might be experiencing a financial downturn by offering up a few extra dollars at the door. You can’t deduct tips to the paperboy or the pizza delivery girl, but who cares? They are bringing you food and other useful things. Be generous.
- And what if you just want to help out your neighbor or your favorite driver? Don’t overthink this. If you’re helping out of the kindness of your heart (or with “detached and disinterested generosity“) and not expecting anything in return, it’s a gift: gifts are not taxable for income tax purposes. And unless you make a habit of giving individuals gifts above the annual gift tax exclusion ($15,000 for 2020), you’re fine when it comes to the gift tax, too. And yes, that includes GoFundMe and similar fundraisers.
- What about gifts to tide over employees? No matter what you want to call it (a thank you, a perk), a donation made to an employee is considered compensation. That’s especially true for cash or cash equivalent. There’s an exception for small non-cash gifts considered de minimis: Those gifts are not taxable. So, a small basket of fruit would be de minimis and nontaxable—a massive box of your favorite treats, likely taxable, though clearly still delicious.
- What about donating your services virtually? Some folks are creating videos that offer essential information about taxes, working from home, and the like. If you’re sharing your expertise for free, there are no tax consequences to you. If you share your skills on behalf of a charitable organization, you can claim a tax deduction for your out-of-pocket expenses but not for your time. And if your video offers no practical knowledge and is just you being silly? We like watching those, too – still no tax consequences!
Check back regularly: I’ll continue to update you as information becomes available. If you have an update or tip, here’s how to reach me (including secure methods).