What You Need to Know About College Donation Deductions

If you’ve been seeing more university flyers in your mailbox lately, it’s no coincidence. Many businesses ramp up their donation hunting efforts around the holidays — colleges and universities being no exception.

Making a charitable contribution to a school is another great option for those looking for new ways to give back this holiday season. Whether you are a college alum, the parent of a child at university, or simply a generous local resident, schools count on your donations to provide quality education for their students. And you just might be able to claim a tax deduction in the process!

Is my donation to a college tax-deductible?

Yes, most charitable donations made to colleges and universities are tax-deductible. Many nonprofit schools typically qualify as tax-exempt organizations under the Internal Revenue Code (IRC). This means you can generally deduct charitable donations made to these institutions on your tax return. To be sure, you can always look up your preferred college using the Tax Exempt Organization Search Tool on the IRS’s website.

Since donations are often the main source of revenue for these qualified organizations, colleges and universities rely heavily on charitable giving. If you are looking for another last-minute way to lower your tax bill next year, supporting a university with a donation is a great way to ensure your money is being put to good use.

Do I have to itemize to qualify for this charitable deduction in 2021?

No, this tax year you don’t have to itemize your deductions on your tax return to claim the tax credit. Thanks to the temporary extension and expansion of the CARES Act, those who take the standard deduction can still write off their qualified charitable contributions. This year individuals can deduct a maximum of $300 (and up to $600 if you are married and file jointly) before your adjusted gross income (AGI) is calculated, ultimately lowering your taxable income.

Special rules to keep in mind

While most donations to nonprofit colleges and universities are covered by the charitable tax deduction, there are some caveats to be aware of before you decide how to donate.

To ensure your donation is tax-deductible, your contribution must not give you the right to purchase certain seats at sporting events. If the ability to purchase seats at athletic events is included with your donation, the IRS no longer allows you to claim the deduction on your federal tax return. This wasn’t always the case, as you used to be able to claim up to 80 percent of such contributions; however, the Tax Cuts and Jobs Act passed back in 2017 reversed this tax benefit.

Despite the federal repeal, not all states decided to implement the same restrictions. Depending on where you live, you may still be able to claim this deduction on your state income tax return. Just be sure to check your state’s unique rules beforehand!

Take advantage of tax-deductible college donations

It’s no secret that donating to your alma mater or another favorite university is a great way to benefit the school, its students, and the surrounding community. Throw in an extra above-the-line tax break for yourself and making the decision to donate is a no-brainer! If you have a little extra money left over for the holidays, consider sending a charitable gift to the college of your choice.