[Content was a featured post on ACSTO’s ‘News & Updates’ blog on 02/21/13.
Click for blog link here.]
One of the largest hindrances for people wanting to make a tax credit donation is that there is usually a large gap of time between when they donate and when they can receive the credit. Fortunately, this problem was recognized in the legislature, and tax law now allows you to make your donation at the beginning of the year just before you file your taxes, and still count that donation for the previous year. It is a permanent change called the April 15th relateback.
This relateback changes the donation deadline to April 15th instead of December 31st, or prior to when you file your taxes, whichever comes first. This deadline only applies to Original and Overflow/PLUS individual tax credit donations. Everything else, including other kinds of tax credits, is still due by December 31st. If you want to claim your tax credit donation as a Federal deduction, the deadline is also still December 31st. There are no extensions for the relateback beyond April 15th of any kind. Donations must be postmarked or entered online before midnight, April 15th.
This means that if you donate between January 1st and April 15th, it is up to the donor to choose which year they will claim the donation.
Because of this new deadline, figuring out exactly what you can donate has never been easier! You are able to gather all your income documentation at the beginning of the new year, calculate your exact liability, donate that amount, file your taxes, and receive your tax credit. This eliminates most of the gap between donating and receiving a credit.
This means that if you’ve already donated for last year, but discover that you have some income tax liability left over when you sit down to calculate your actual tax, you can make another donation to ACSTO and still claim it on your 2012 taxes to finish off the year, so long as you are still within the maximums allowed ($2006/$1003 for married/single, respectively).