Are Church Donations Tax Deductible?

There are many reasons why your supporters give to your church. One of them may be to enjoy the benefits of a tax-deductible gift. But...are donations to your church even tax deductible? Read on to learn when donations to churches are tax deductible and some solid methods churches can employ to make tax time easier for their supporters.

6 minutes read
Are Church Donations Tax Deductible?

When someone gives to a church, they’re supporting so much – the church’s mission, the work the church does in the community, and more. They’re also strengthening their connection and commitment to God.

Now, a question that often gets asked is can your supporters also claim their church donations and tithing on their taxes to get a deduction?

In this article, we’ll answer that question and more.

Are Church Donations and Tithes Tax Deductible?

Short answer: yes, church donations are tax deductible. However, there are some important stipulations to remember to ensure your congregants get the full benefit of the tax deductions for their donations.

Church donations are tax deductible only to churches that meet the requirements of section 501(c)(3) of the Internal Revenue Code. If your church meets these requirements, you receive tax-exempt status automatically without having to apply for recognition of exempt status with the IRS.

These 501(c)(3) requirements include –

  • The church is organized and operated solely for religious purposes.
  • The church isn’t operated for the benefit of any private shareholder or individual.
  • The church doesn’t attempt to influence legislation or participate in campaign activities.

It’s your responsibility as a church to ensure you meet these requirements so your donors can receive the full benefit of their generosity! Your church also needs to make tax filing easy for supporters. You should send them donation receipts as well as a consolidated year-end tax receipt so that tax filing is simple on their end. Read more on this later in this blog.

Donorbox makes this a breeze. For every donation your church campaign receives, Donorbox automates the donation receipt to your donor. You get the ability to customize it to meet your needs. Donorbox also lets you send a customizable year-end tax receipt that you can send to all or selected donors. Here’s how the automated donation receipt email looks –

donorbox receipt email example

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Restrictions on Annual Church Donations

There are some limitations on how much your congregants can claim on their taxes.

Total church giving plus any additional charitable contributions can’t exceed 60% of someone’s adjusted gross income for the year. In cases where it does, that person can’t deduct all of their donations for the current tax year. The unclaimed deductions can be used for future tax returns.

However, special considerations for the 2020 and 2021 tax years allowed the contribution limit to reach 100% of adjusted gross income – so while the restriction of 60% still stands moving forward, it does sometimes change depending on the year.

What Donors Need from You to Deduct Church Donations

When it comes time to file taxes, those who have contributed to your church over the last year have to provide proof of their donations to deduct them using Schedule A.

For most smaller donations, this proof can be the following –

  • Their bank statement showing the contribution.
  • A timely written acknowledgment from your church, like a thank-you letter.

However, for donations larger than $250, donors must have an official receipt of the donation from the church. For your recurring donors or those who have tithed regularly at your church, you should also send a consolidated annual giving report or year-end tax receipt to make tax filing easy for them.

Now that you know what your congregants need to deduct their donations, let’s look at how you can make life easier for them this tax season.

How Your Church Can Make Tax Time Easier for Donors

1. Set up online giving

Keeping track of every offline donation and sending a receipt or a thank-you can be too difficult for your church. The solution? Online giving.

An all-in-one online fundraising platform like Donorbox offers ample options to make online giving simple and quick for donors. Recurring giving is a popular choice for churches, too. This enables your supporters to tithe weekly or monthly (or at other regular intervals) and receive automated donation receipts for their donations.

And recurring giving matters a lot for your church – donors who set up recurring giving end up giving 42% more a year than those who don’t.

With Donorbox, you can also create unlimited online donation forms and pages to run your fundraising campaigns and accept online donations. We offer you free QR codes to help redirect donors to your church campaigns. You can also leverage Text-to-Give to empower people to quickly give to your church from their smartphones.

The Donorbox Live ™ Kiosk app turns your tablet and card reader into a powerful tool to collect donations on-site at your church. If you host events, our Donorbox Events enables you to sell tickets online and your ticket purchasers receive a receipt right away!

No matter which way you choose to fundraise with Donorbox, your supporters will receive automated receipts to file their taxes. We also give your donors their own accounts where they can log in to manage their donations and receipts, as shown below.

donor portal enabling donors to manage donations and receipts on donorbox

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2. Automated donation receipts

It’s difficult to manually track donations larger than $250 and send donation receipts only to those supporters. Why not use an online system that automates the process of sending donation receipts to all donors regardless of their donations?

Whenever someone tithes or gives to your church using your Donorbox online donation form, they automatically receive a donation receipt confirming their gift. It’s so important to acknowledge a gift right away so your donors feel appreciated!

With Donorbox, you can also fully customize your donation receipt email to match your church’s branding and messaging. It’s simple – just select the campaign you want to customize the receipt for, click the “Edit” icon next to its name, and under “Additional Settings,”  edit the Receipt Email. Here’s what it looks like to customize your donation receipts on Donorbox –

automated donation receipts on donorbox

Create Customized Donation Receipts

Pro tip: For your receipt to serve as documentation for the donation, it must include the date of the donation and the total amount given. Learn more about the requirements for 501(c)(3) receipts here. Donorbox receipts include those details by default, so you can rest assured! It’s also important to include on your receipts if the donation was made to any specific fund or with any stipulations, like a love offering.

Bonus: Watch our quick tutorial video on how to create a donation receipt on Donorbox. We have another video that talks about the why and when of donation receipts – a pertinent question for churches and nonprofits.

3. Year-end tax receipts

Automated receipts after every donation are great because they reassure your donors that you received their donation (and remind them how grateful you are!). But if someone has given weekly for the entire year, those 52 receipts can be quite cumbersome when it comes to tax time.

That’s where year-end tax receipts come in handy. Donorbox lets you send them to all or selected donors with just a few clicks. These receipts include an email message and a PDF listing the entire year’s donation details. You can customize the email and the PDF thank-you message on Donorbox before sending these receipts out.

Here’s what it looks like –

is tithing tax deductible

are donations to church tax deductible

Send Year-End Tax Receipts to Donors

Helping your donors with their taxes takes little effort on your end but makes a big difference on theirs. This will help encourage them to be even more generous to your church next year!

Final Thoughts

Tax season can feel like one long headache to your church supporters. Luckily, as long as your church sticks to the 501(c)(3) requirements, your donors can deduct their donations on their next tax return.

This will both save them money they can use to give back to your church in the coming year and incentivize them to give more in the future.

Make tax time as easy as possible for your donors by setting up online donations, providing automated receipts for every donation, and sending a year-end receipt summarizing all their giving.

Donorbox makes it easy for churches to accept online donations – and for donors to give more to the churches they love. Your donation receipts are automated and you can also send a consolidated year-end tax receipt to your donors.

Ready to boost your church fundraising? Learn more about Church Fundraising on Donorbox and check out our powerful list of tools.

Sign up today and start your first campaign in 15 minutes.

Read church fundraising articles, guides, leadership best practices, donor management tips, and more on our Nonprofit Blog. Subscribe to our newsletter to receive a curated list of our best resources in your inbox every month.

Frequently Asked Questions [FAQs]

1. Does my church have to apply for tax-exempt status?

As long as your church meets the requirements outlined in section 501(c)(3) of the Internal Revenue Code, you do not have to officially apply for tax-exempt status. You receive it automatically.

However, there are reasons why some churches choose to do so. These include transparency with donors, increased accountability since the IRS has to vet church documents, and certainty that donations are tax-exempt.

Check out tax programs around the world to learn more about church relationships with taxes.

2. What percentage of my church donations are tax deductible?

All of your church donations are tax deductible, assuming your church meets the 501(c)(3) requirements. But you might not be able to claim them all in one year.

If your donations exceed 60% of your Adjusted Gross Income, you will need to claim the remaining donations in future tax years.

3. What does the Bible have to say about Christians deducting taxes on church donations?

Some might be concerned that deducting their church donations is greedy or against the point of tithing. Don’t worry – it’s not! The Bible encourages paying taxes and tithing, so doing both in a financially savvy way is great.

For example, in Matthew 22:17-21, Jesus encourages those gathered to “render what is Caesar’s to Caesar, and what is God’s to God.” Meaning we have a responsibility to both tithe and pay taxes.

Lindsey Baker

Lindsey spent years wearing many hats in the nonprofit world. Whether she was helping arts nonprofits with their messaging and content, planning a fundraising gala, writing an NEA grant proposal, or running a membership program with over 400 members, she learned how to navigate – and appreciate! – the fast-paced world of fundraising. Now, she loves sharing those hard-earned lessons with the Donorbox community.

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