On What Year's Taxes Can I Claim a Deduction If the Nonprofit Only Just Got 501(c)(3) Status?

Dealing with retroactively tax deductible donations to charity.

Ordinarily, deducting charitable donations on your taxes is fairly straightforward: You do so for the year in which you made the donation. So if you donated to an IRS-recognized, 501(c)(3) nonprofit in 2018, you would put it on your 2018 tax return.

But what if you chose to donate to a new nonprofit, which was still in the process of getting 501(c)(3) approval from the IRS? You can't immediately claim the donation for the year in which you made it (2018 in the above example) if the nonprofit didn't obtain 501(c)(3) status for that whole year.

The good news is, if the IRS eventually grants that approval, then your donation is likely to be retroactively tax deductible. But you can't claim it on a later year's tax returns, either, because the date of the donation would be off.

The solution is to file an amendment to your tax return in order to claim the deduction. If, for example, you donated to a nonprofit in 2018, but the Internal Revenue Service (IRS) does not grant tax exemption to the nonprofit until 2019, you need to file an amendment to your 2018 tax return in order to claim that deduction.

You must file the amendment within three years of the date you filed your return. That means that, if you made the donation in 2018, you have until 2021 to file the amendment.

There are rules and deadlines applicable to tax return amendments, so it’s best to speak with a tax adviser if you find yourself in this situation.

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