Want to contribute money to a charity?
Don't whip out your wallet. Fill out your state tax
At least 41 states and the District of
Columbia include lines on individual tax forms where
taxpayers can contribute to selected organizations,
according to the Federation of Tax Administrators. The
grand total: 220 programs that taxpayers can give to
while also giving the state its tax due.
The donations are referred to as check-offs,
since most forms contain a box the taxpayer checks to
make the donation.
States usually let taxpayers donate part
or all of their state refunds to a cause. Some permit
filers to increase a tax payment to boost the donation.
A few allow taxpayers to redirect part of their state
tax liability, but this is limited to political campaign
funds and does not affect a filer's refund or overall
Charities featured on state tax returns
run the gamut from organizations supporting research
of chronic diseases to groups championing wildlife protection.
Uncle Sam initiated check-off boxes in
1972 by allowing taxpayers to designate $1 to a special
presidential campaign fund. (It's still around, but
$3 per taxpayer now.) In 1977, Colorado became the first
state with a check-off program, with the original donations
In the quarter century since charity check-offs
first appeared, they've been productive. According to
the latest data collected by the FTA, $32.8 million
went to state check-off programs on state returns processed
in 2002. That's a $5.5 million jump from the previous
survey in 2000 and the largest two-year increase reported
Benefits and costs
Donating money to charity via your tax return doesn't
offer you any special state or local tax consideration.
It's a deduction, but no more or no less than one made
the old-fashioned way by writing a check.
In fact, it could be a bit more tedious
for the donor. If you're not a meticulous record keeper,
you'll need to remember to claim your tax-form deduction
on next year's federal (and where applicable, state)
That said, the charity check-off is relatively
painless, since it's usually coming out of a tax refund
that you haven't yet seen.
And the programs obviously are a boon
to charities. California's program generally ranks at
the top of the philanthropic gift meter. Golden State
officials report that in fiscal year 2001, taxpayers
donated more than $4 million to charities via tax returns.
Only states experience a downside. Letting
taxpayers donate to causes on tax returns creates more
paperwork. The program's popularity has even led to
crowding on some state returns, notes the FTA, forcing
the creation of separate forms just for check-offs.
"This adds to their costs of processing tax returns,"
says the organization, "and can lead to a greater
number of errors."
But states are not likely to end the practice.
Tax officials generally view the administrative costs
as low, considering how much money is raised for charities.
California officials say it cost the state $64,362 to
administer the check-offs that produced the $4 million-plus
Updated: Feb. 14, 2006