Giving and tax (US)

What it is

No US law requires companies to spend on CSR. What US companies need at year end is different: how much of their giving they can deduct for federal income tax, whether the paperwork behind each gift is in place, and what they invested in communities for their impact report. The Giving and tax page answers all three from the same records, for one fiscal year.

Charitable contribution deduction. Under section 170 of the Internal Revenue Code, as amended by the One Big Beautiful Bill Act (2025), a corporation deducts contributions paid in the tax year to qualified organizations. For tax years beginning in 2026 or later, only the contributions above 1% of taxable income are deductible, up to 10% of taxable income. Contributions over the 10% ceiling carry forward for five years; the amount under the 1% floor carries forward only in a year when the ceiling is also exceeded, and is otherwise not deductible. Earlier tax years have the 10% ceiling and no floor. You enter taxable income before the charitable deduction; the page shows the floor, the ceiling, the contributions to qualified organizations, the estimated deduction, the amount carried forward and the amount that is not deductible.

Records to check and community investment. A contribution counts when the organization has its EIN and 501(c)(3) status recorded, or is marked as a government body. The page lists the contributions that don't count yet, the gifts of $250 or more without a written acknowledgment on file, and the non-cash gifts over $5,000 that need a qualified appraisal and Form 8283 Section B. It also sets out your community investment: cash, in-kind, volunteer time and people helped. The figures are general information, not tax advice.

What you can use it for

• Estimate the deduction for the tax year, with the 1% floor and the 10% ceiling.
• See the amount carried forward and the amount under the floor that is not deductible.
• Find the records to check: organizations without an EIN and 501(c)(3) status, payments not linked to an organization, gifts of $250 or more without a written acknowledgment, non-cash gifts over $5,000.
• Keep sponsorship out of the contributions: it is shown within cash, separately.
• Report community investment: cash, in-kind, volunteer time (approved hours × the value of a volunteer hour) and people helped.
• Download a CSV, or the US report pack from the ESG report.

How to do it

Get your records right

1. Set the fiscal yearIn Settings → Reporting, set the fiscal year to start in the first month of your tax year. The page shows which period it covers.
2. Record EIN and statusOn each nonprofit, add its EIN and IRS 501(c)(3) status after checking the IRS Tax Exempt Organization Search. Mark a city, county, state or public school district as a Government body.
3. Mark each paymentWhen you record a payment in the budget, choose Donation or Sponsorship, and cash or in-kind. Only paid amounts dated in the year count.
4. Keep the acknowledgmentFor every gift of $250 or more, enter the charity's receipt number or upload its written acknowledgment on the payment.

Read the page

1. Open the pageGo to CSR workspace → Giving and tax and choose the year.
2. Enter taxable incomeOpen Edit taxable income and enter taxable income before the charitable deduction, from your tax provision or return. A loss can be entered as a negative number.
3. Read the deductionRead the floor, the ceiling, the contributions, the estimated deduction, the amount carried forward and the amount not deductible.
4. Fix the recordsWork through Records to check: add the EIN and status, link the payment, add the receipt number, or note the appraisal for your adviser.

Download

1. CSVSelect Download CSV for the year.
2. US report packFor the whole year in one spreadsheet, go to the ESG report and download the US report pack.
3. CheckConfirm the tax figures with your adviser before they go into the return.

Tips and good practice

• Record the EIN and 501(c)(3) status before year end. Contributions to an organization without them are listed as records to check, not counted.
• A written acknowledgment must be in hand by the time you file the return. Ask for it when you pay, not in March.
• Non-cash gifts are recorded at the amount you enter. For donated products or equipment that is generally no more than their cost to the company; your adviser confirms the value, and whether an appraisal is needed.
• Carryovers from earlier years are not tracked. Give your adviser the figure from last year's return.
• The value of a volunteer hour is set in Settings. New US companies start at $36, close to Independent Sector's national estimate of the value of a volunteer hour; use your own cost if you have it.
• Volunteer time is never deductible as a contribution. It appears in community investment, not in the deduction.
• CorpHands does not process donations. Your company pays nonprofits directly.

Questions