Who Needs Scholarships from the United Way of Bucks County?
When we first spoke with Katelyn, her voice quivered over the phone line. As the mother of a 4-year-old son, Liam, who has developmental delays, life has been challenging. Being a single mom and a healthcare worker is hard enough, but Katelyn also falls into the category known as ALICE (Asset Limited, Income Constrained, Employed). Even though she earns more than the poverty line, her income barely covers living expenses in Bucks County.
On top of that, finding a Pre-K program that caters to Liam’s needs and fits within their budget has been impossible, causing her to miss work and risk her job. “My kids are my world,” she tells us with a heavy heart, “I feel like I’m letting them down.” Luckily, our early education team was able to bring light to their situation. Liam now attends our free Pre-K Counts program close to home in a high-quality setting. The program even includes special sensory rooms to help children like Liam. Katelyn sighed with relief; “It feels like I can finally breathe.”
But what about those who wish to support such causes financially? Is their generosity rewarded at tax time?
Are Donations to Scholarship Funds Tax Deductible?
Yes. According to the Internal Revenue Service (IRS), donations to eligible scholarship funds can be tax-deductible. However, specific conditions must be met.
- The scholarship fund should belong to a qualified 501(c)(3) nonprofit organization. The United Way of Bucks County meets this requirement.
- The IRS sets limits on how much can be deducted for such donations. The maximum deductible donation is generally 60% of the donor’s Adjusted Gross Income (AGI).
- Proper records and documentation are crucial. You should obtain a written receipt for contributions above $250. It should include the donation amount, the date, and a statement confirming no goods or services were provided in return for the donation. We are happy to provide such documentation for all donations.
Scholarship funds are instrumental in aiding students financially and we rely on donations to keep them available to our Bucks County neighbors that need them. However, as the IRS does have set regulations, so seek advice for the most accurate and current information on taxation. You can also refer to the IRS publications listed below.
Internal Revenue Service (IRS): Charitable Contributions – Substantiation and Disclosure Requirements. Retrieved from: https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contribution-deductions
Internal Revenue Service (IRS): Publication 526 – Charitable Contributions.
Retrieved from: https://www.irs.gov/forms-pubs/about-publication-526