The Tax Deduction of a Donation to the United Way

The United Way Worldwide is one of the oldest and largest charitable U.S. organizations, tracing its history back to 1887. It has more than 1,800 local community-based member organizations in 45 countries and territories. Their missions involve advancing the common good through education, income stability and healthy living. All local United Ways are required to be tax-exempt 501(c)(3) organizations, and as such donations to the United Way are tax-deductible if you itemize.

Before you donate to a local United Way organization, make sure that organization is actually affiliated with the national United Way and is a qualifying tax-exempt organization. Many organizations have similar-sounding names, which can cause confusion. When in doubt, check through the Internal Revenue Service's online Select Check tool. The IRS maintains a complete list of all tax-exempt organizations that qualify to accept tax-deductible donations.

If you want to write off your donation to the United Way, you must get and keep written documentation for all cash contributions, regardless of the amount. The IRS considers donations made with a check, electronic funds transfer, payroll deduction, credit card or debit card to be cash donations. The documentation required varies based on the amount of your contribution, but typically it must record the amount and date of the donation in addition to the name of the organization.

You must itemize your deductions if you want to claim a tax-deduction for your donations to the United Way. Add your donations to the United Way to your other charitable contributions on Lines 16 and 17 of Schedule A. If you donate more than $500 you'll need to complete and attach Form 8283 as well. If the total amount of your itemized deductions is less than your standard deduction, you'll be better off claiming the standard deduction.

Federal tax law limits the amount you can deduct for charitable contributions to public charities such as the United Way to no more than 50 percent of your adjusted gross income. If you contribute a higher amount, you can carry the excess over to the next and subsequent years, up to a maximum of five years, until your total donation is accounted for.