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Deducting Reward Points Charitable Donations
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One of the options in the Thank You reward network, Citi’s cashback and reward network, is the ability to turn your points into donations to a set of charities on a 1 point to 1 penny basis so that 1000 points turns into a $10 donation. I always wondered whether you were allowed to deduct that as a charitable donation on your tax return and today I was treated to the answer in an article about reward credit cards (Smart Money).
The answer is no. The reason is because the charitable donation is actually made by the credit card company and not by you so you can’t deduct it. In order to deduct it, you have to make the contribution yourself so you should request the cash back and then make the donation.
This also holds true for any reward programs you might be a part of, outside of a credit card company, where you can convert loyalty points into a charitable contribution. That stinks but it does make sense from a tracking perspective. Don’t let it stop you from donating though, it’s just one extra step!
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This is a very unique idea, I have never even considered this as a possibility before. I know my check company donates to the United Way every time I write a check, but it didn’t register for me to use my credit card cash back.
Thanks for the great tip!
It’s one extra step, assuming that your rewards company will cut the check to you and not just as a charitable donation.