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Deducting Reward Points Charitable Donations

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 [3]).

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!