Are Item Donations Tax Deductible? A Nonprofit's Guide to In-Kind Receipts

Every organization running an item drive gets this question, usually from a donor who just spent $180 on classroom supplies: is this tax deductible?

The short answer is generally yes — donations of goods to a qualified 501(c)(3) are deductible at fair market value, if the donor itemizes and if the paperwork exists. But each of those conditions carries weight, and one of them changed meaningfully in 2026 in a way that specifically disadvantages item giving.

This guide covers what the rules require, what your organization has to provide, and what changed this year.

This is general information, not tax or legal advice. Rules change, situations vary, and neither your organization nor your donors should rely on a blog post. Have your CPA review any receipt template or donor guidance before you use it.

What Changed in 2026, and Why It Matters for Item Drives

This is the part most item-drive guidance hasn't caught up to yet.

The One Big Beautiful Bill Act created a new permanent above-the-line charitable deduction for taxpayers who don't itemize, effective for tax year 2026. Under IRC §170(p), non-itemizers can deduct up to $1,000 (single) or $2,000 (married filing jointly) in charitable contributions directly on Form 1040, with no Schedule A required. Before this, the roughly two-thirds of taxpayers who take the standard deduction got no tax benefit from charitable giving at all.

That's genuinely good news for the sector. Here's the catch for anyone running an item drive:

The non-itemizer deduction applies to cash contributions only. Cash, check, card, electronic payment, and payroll deduction qualify. Non-cash gifts — clothing, household goods, supplies, furniture, vehicles, securities — do not. Contributions to donor-advised funds and most private foundations are also excluded, and there's no carryforward for amounts above the cap.

So beginning in 2026, a donor who takes the standard deduction gets a deduction for sending your organization $50 and gets nothing for buying $50 of the exact items you asked for.

A second change affects itemizers. OBBBA added a 0.5% AGI floor on charitable contributions under IRC §170(b)(1)(I). Only the portion of total giving — cash and non-cash combined — exceeding 0.5% of adjusted gross income is deductible. For most donors this is a small threshold rather than a disqualifier, but it's a new calculation step. The floor applies only to itemizers; a non-itemizer claiming the $1,000/$2,000 deduction isn't subject to it. OBBBA also raised the SALT cap substantially, which will push more taxpayers back into itemizing.

What this means practically: if a donor asks which is better for their taxes, the honest answer now depends on whether they itemize. For non-itemizers, cash has a clear advantage it didn't have before. That's a real headwind for item-based giving, and pretending otherwise doesn't help anyone.

It's also a strong argument for accepting both. A drive page that offers items and monetary giving lets the donor choose the treatment that suits their situation while your organization gets supported either way. A page that only accepts items forces some donors to give in the least tax-efficient way available to them, and some of them will notice.

The Substantiation Thresholds

These are the rules that determine whether a donor can actually claim the deduction. They're organized by the value of the donated property.

Under $250. The donor needs a receipt from your organization or otherwise reliable written records showing your name, the date, and a reasonably detailed description of what was given.

$250 or more. The donor needs a contemporaneous written acknowledgment from your organization. "Contemporaneous" means obtained before the donor files the return (or the due date, including extensions), whichever is earlier. This is the threshold most item drives cross, and it's the one where retail wishlists leave donors stranded — Amazon doesn't issue acknowledgments on your behalf.

More than $500. The donor must also file Form 8283 (Noncash Charitable Contributions), Section A, with their return. Section A requires details about the property and how it was acquired.

More than $5,000. The donor generally needs a qualified appraisal and must complete Form 8283 Section B, which your organization has to sign as the donee. Signing acknowledges receipt — it isn't an endorsement of the claimed value.

More than $500,000. The qualified appraisal itself must be attached to the return.

Note that these thresholds apply to similar items in aggregate, not per individual object. A donor giving 200 individual school supplies worth $600 total is over the $500 threshold.

Who Determines the Value — and Why Your Receipt Shouldn't State One

This is the single most common mistake nonprofits make on in-kind receipts, and it's worth getting right.

The donor determines fair market value, not your organization. Your acknowledgment should describe the donated property — "42 boxes of assorted school supplies" — and should not assign a dollar value to it. IRS Publication 561 covers how donors determine fair market value.

For goods purchased new and immediately donated, FMV is usually straightforward — it's essentially what the donor paid. For used goods it's the price a willing buyer would pay for property in that condition, which is typically well below original cost.

Your acknowledgment must include:

• Your organization's name

• The date of the contribution

• A reasonably detailed description of the property received

• A statement of whether your organization provided any goods or services in return, and if so, a good-faith estimate of their value

• A statement that no goods or services were provided, if that's the case

Your acknowledgment should not include: a dollar value for the donated property.

If a donor asks you to put a value on the receipt, the correct answer is that you can't — and that you're protecting them by not doing it. An organization that assigns values it isn't qualified to assign creates exposure for the donor if the number is challenged.

A note if you use a platform with automatic receipts: check what your receipts actually say. Item drive platforms sometimes pull the retail price into the acknowledgment, which is convenient and may not be appropriate. Have your CPA review the template before you send thousands of them.

The "Good Used Condition" Rule

For clothing and household items, the donor generally cannot claim a deduction unless the item is in good used condition or better. This came from the Pension Protection Act of 2006 and it's why "gently used" language matters legally as well as practically.

Household items in this context include furniture, electronics, appliances, and linens. Items in poor condition generally aren't deductible at all.

This aligns neatly with why most shelters and programs ask for new items anyway. If you accept used goods, it's worth telling donors this rule exists — it reframes your condition requirements as protecting their deduction rather than being fussy.

Donated Time and Services Are Not Deductible

Worth stating plainly because it comes up constantly.

The value of volunteer time and professional services is never deductible. A graphic designer who donates $3,000 of design work cannot deduct $3,000. This surprises professionals every year.

Unreimbursed out-of-pocket expenses incurred while volunteering may be deductible, however — mileage at the charitable rate, supplies purchased for the organization, parking and tolls. Those follow the normal substantiation rules.

For your organization's part: donated services generally aren't recorded as contribution revenue on Form 990 either, though there are narrow accounting exceptions for specialized skills that create or enhance a nonfinancial asset. That's a conversation for your accountant, not a blog post.

What This Means for Wishlist Donations Specifically

Here's where the theory meets the actual mechanics of an item drive.

When a donor buys items from your wishlist and has them shipped to you, they've made a non-cash charitable contribution of property. If the value is $250 or more, they need a contemporaneous written acknowledgment from your organization to claim it.

Retail wishlists generally can't produce that. Amazon doesn't issue acknowledgments on behalf of your 501(c)(3), and in many cases doesn't even tell you who the donor was. So the donor has an Amazon order confirmation — which documents a purchase, not a charitable contribution — and no acknowledgment from the charity that received it.

For a $30 gift, most donors don't care. For the local business that spent $2,000 on your list, or the family that covered $400 of holiday gifts, it matters, and they will ask.

What you need in order to receipt item donors properly:

1. The donor's name and contact information

2. A record of what was received and when

3. The ability to generate an acknowledgment with the required elements

Retail wishlists give you none of the first and limited amounts of the second. Platforms built for nonprofit donation drives capture donor information on each gift and generate acknowledgments automatically — which is the practical reason receipting comes up so often in comparisons between the two.

What Your Organization Has to Do

Donor-side rules get most of the attention. Your organization has obligations too.

Form 990 reporting. Non-cash contributions are reported on Form 990. Schedule M is required if your organization received more than $25,000 in non-cash contributions during the year, or received certain categories of property such as art or historical treasures. This is a practical reason to track in-kind value accurately even though you don't state it on receipts — you need the aggregate figure for your return.

Form 8283 Section B signature. If a donor gives property valued over $5,000 and asks you to sign their Form 8283, you sign as the donee acknowledging receipt.

Form 8282. If your organization disposes of donated property valued over $5,000 within three years of receiving it, you generally must file Form 8282 and provide a copy to the donor. This catches organizations that sell or transfer donated goods without realizing there's a filing requirement.

Recordkeeping. Keep descriptions, dates, donor information, and your good-faith valuation records for the 990. Your auditor will want them, and so will you when a donor calls in March asking for a duplicate receipt.

Practical Guidance for Running Drives

Capture the donor on every gift. Everything above depends on knowing who gave you what. This is the single most consequential operational decision in an item drive.

Send acknowledgments promptly, ideally automatically. "Contemporaneous" has a deadline, and a receipt sent in April is worthless to someone who filed in February.

Describe, don't value. Get your template right once and use it everywhere.

Tell donors the rules honestly. A short line on your drive page — that gifts of goods are deductible for itemizers, that they should keep their purchase records, that you'll send an acknowledgment, and that they should consult their tax advisor — is more useful than a blanket "tax deductible!" claim that isn't true for everyone.

Offer the monetary option. Especially in 2026 and after. For a non-itemizing donor, cash now carries a deduction that goods don't, and some of your donors will want that.

Don't oversell the deduction as a motivator. Research consistently finds tax treatment is a secondary driver of giving at most income levels. People give because they want the thing to happen. The receipt is hygiene, not persuasion — but bad hygiene loses your largest donors.

Frequently Asked Questions

Are item donations tax deductible? Generally yes, for donors who itemize. Donations of goods to a qualified 501(c)(3) are deductible at fair market value, subject to substantiation requirements that increase with value. Beginning in tax year 2026, the new above-the-line deduction for non-itemizers ($1,000 single / $2,000 married filing jointly) applies to cash contributions only, so non-itemizing donors generally cannot deduct donated goods.

Can non-itemizers deduct donated goods in 2026? No. The OBBBA non-itemizer deduction under IRC §170(p) covers cash contributions only — cash, check, card, electronic payment, and payroll deduction. Non-cash gifts such as clothing, household goods, supplies, and securities don't qualify, nor do gifts to donor-advised funds or most private foundations.

What documentation does a donor need for an in-kind donation? Under $250, a receipt or reliable written records. At $250 or more, a contemporaneous written acknowledgment from the receiving charity. Over $500, Form 8283 Section A with the return. Over $5,000, generally a qualified appraisal plus Form 8283 Section B signed by the charity. Over $500,000, the appraisal must be attached.

Should a nonprofit put a dollar value on an in-kind donation receipt? No. The donor determines fair market value, not the charity. Your acknowledgment should describe the property received, state whether you provided any goods or services in return, and omit any dollar figure. IRS Publication 561 guides donors on determining value.

Is an Amazon wishlist donation tax deductible? The underlying contribution generally is, but donors often can't substantiate it. Amazon doesn't issue acknowledgments on behalf of your organization and frequently doesn't pass along donor identity, so a donor giving $250 or more may have no way to obtain the contemporaneous written acknowledgment the IRS requires. If receipting matters to your donors, you need a platform that captures donor information and generates acknowledgments.

Can donors deduct the value of their volunteer time? No. The value of donated time and services is never deductible. Unreimbursed out-of-pocket expenses incurred while volunteering — mileage at the charitable rate, supplies, parking — may be, following normal substantiation rules.

Do used clothing and household items qualify? Only if they're in good used condition or better, a requirement dating to the Pension Protection Act of 2006. Items in poor condition generally aren't deductible.

What does our nonprofit have to report for in-kind donations? Non-cash contributions are reported on Form 990, and Schedule M is required if you received more than $25,000 in non-cash contributions or certain categories of property. You may need to sign a donor's Form 8283 Section B for gifts over $5,000, and you generally must file Form 8282 if you dispose of such property within three years.

What is the 0.5% AGI floor? A change under OBBBA (IRC §170(b)(1)(I)) applying to itemizers beginning in 2026: only total charitable contributions — cash and non-cash combined — exceeding 0.5% of adjusted gross income are deductible. It doesn't apply to non-itemizers claiming the $1,000/$2,000 above-the-line deduction.

The Bottom Line

For most of the history of item drives, the tax answer was simple enough to put on a flyer: donations are deductible, keep your receipt.

As of 2026 it's genuinely more complicated. Non-itemizers — about two-thirds of taxpayers — now get a deduction for cash and not for goods. Itemizers face a new AGI floor. And the substantiation requirement that kicks in at $250 has always been the thing retail wishlists can't satisfy, which matters more as your average gift grows.

None of this is a reason to stop running item drives. People donate goods because it's tangible and specific, and more Americans give that way than give cash. But it is a reason to do three things: capture your donors so you can actually receipt them, get your acknowledgment template reviewed so it describes rather than values, and offer a monetary option so the donor who'd rather have the deduction can take it.

And say "consult your tax advisor" and mean it. The rules changed this year, and they'll change again.