(Updated on September 30, 2021 – originally published on February 20, 2020)

Generally, contributions made to “crowdfunding” campaigns (such as GoFundMe) are considered to be personal gifts, and as such, are not taxed as income to the recipient. The IRS does not consider fundraising proceeds a taxable source of income. However, you could still owe taxes, depending on how the funds were used and if anything was provided in exchange. If you are the recipient of a crowdfunding campaign, be sure to keep good records of contributions received and consult your tax advisor.

Let’s look at crowdfunding in general. Two key factors are important with regard to determining if there is a tax liability:

  1. What was the campaign organizer’s intent?
  2. Did the supporters receive goods and/or services in exchange for their contributions?

Intent and Exchange

If the organizer’s intent was to raise funds in exchange for goods and/or services, the raised funds are considered taxable business income by the IRS. For example, if an organizer wants to raise funds to kick-start the production of a musician’s new CD and he/she says you will receive a “free” copy of the CD for your contribution, the funds will be taxable to the organizer. If, instead, you receive an ownership interest in the business in exchange for your funds, this is considered a non-taxable contribution to the capital or equity of the business.

It is the responsibility of the crowdfunding site, or its third party processor (such as PayPal) to complete IRS Form 1099-K if total contributions exceed $20,000 and more than 200 transactions were made during the calendar year. However, if you receive a 1099-K, it does not necessarily mean that the contributions are taxable to you.

If the organizer’s intent was to raise funds to cover the costs of life events, medical expenses, etc. and no one received any goods and/or services in exchange for their contribution, the income would be considered a gift. Gifts (as mentioned above) are not considered income. For example, if an organizer wants to raise funds for the college expenses of a child who lost a parent, the contributions to the campaign would NOT be taxable.

Other Considerations

Contributions made to crowdfunding sites are earmarked for a particular individual or organization and therefore are NOT tax-deductible (for donations to be tax-deductible, they must be made to a qualified charitable organization (“501(c)(3)” organization) and for the benefit of the general public, not for the benefit of a specific (named) individual or organization). If no goods or services were received in exchange, these contributions would be treated as gifts and would not be taxable to the recipient. However, if the donor exceeds the “annual gift tax exclusion” ($15,000 per donee per year), they may be required to file a federal gift tax return to report their gift.

If you are thinking of establishing a crowdfunding campaign, you should research your options on-line. Whether you are establishing a campaign or contributing to one, you may want to consult with your tax advisor.

Need a tax consultant? Contact us at 401-831-0200.

October 18, 2020

Super helpful! Thank you!

October 31, 2020

Hello,

I’m trying to receive assistance with a down payment on a home for myself and My children. If I have a Go Fund Me in place, will I have to pay tax on or explain those gifts to the IRS?

November 2, 2020

As long as the contributions to the Go Fund Me account are individuals and the contributors do not receive anything in exchange for their contribution, what they give is a gift nontaxable to the recipient and nondeductible by the donor.

March 6, 2021

How about if I raise a fund to donate to foundation outside US?

March 8, 2021

Unfortunately, this question is outside our area of expertise. We suggest contacting GoFundMe directly by using the ‘Get help’ button located at the bottom of this GoFundMe page: https://support.gofundme.com/hc/en-us and then follow the prompts. It will give you an option to directly email your question to them. We trust they can advise you best.

April 25, 2021

My situation is complex, tax wise. I am or was on social security during the pandemic. I am also homeless with a child. I was told to file for the pandemic assistance through unemployment. It was explained that this was simply another method for people to recieve assistance. Thr process for applying was pretty explicit. They did not want to knownifnibwas on social security and many sections stated that everyone was eligible for it regardless if they had been working or were not normally eligible.
It said social security would not affect eligibility. Also the social security office didn’t have any information about it and also stated it would t affect your recepient status.
I applied and recieved an award for it.
However at the same time, a newspaper was publishing a story about us and insisted I include a link to a gofundme because people wanted to help us.
Aside from all thr complications that arose from all of those things, how do I do my income taxes on all of it?

May 28, 2021

You do not need to report the funds received from a GoFundMe campaign as income on your tax return, as long as any contributions to the GoFundMe account were used as indicated clearly in the description, and those who donated did not receive anything in exchange for their contribution. Answering the question regarding any impact the funds received may have on social security or other income sources is beyond the scope of the GoFundMe discussion. We recommend going to your state’s CPA society website to find a local tax advisor.

November 30, 2020

My mother recently passed away. I am considering a go fund me to raise money to assist my father with expenses that incurred from funeral and medical services. Will that be taxed and is there a limit?

December 2, 2020

As long as the contributions to the Go Fund Me account are for individuals and the contributors do not receive anything in exchange for their contribution, what they give is a gift, nontaxable to the recipient and nondeductible by the donor. There is no limit to the recipient for income tax purposes. Donor’s may have gift tax filing requirements depending upon the amount of the gift.

February 23, 2021

Hi! I am looking at start a gofundme campaign to help me afford a new apartment (at least a security deposit and two months rent) while I am in school. Will I have to put this down on my taxes or anything?

February 23, 2021

Be clear when you set up your fundraiser and follow GoFundMe rules that ” “Donations need to be used for the cause listed on the fundraiser.” As long as any contributions to your GoFundMe account are used as you indicate and that those who donated did not receive anything in exchange for their contribution, what they gave is a gift and is nontaxable to you. There is no need to report it as income.

June 9, 2021

I am doing a project in the community to donate diapers to new moms the month they have their babies. Can I use gofundme to collect donations to buy diapers to give to these families?, will it be considered income?

June 17, 2021

If you decide to set up a GoFundMe, be clear on how you will be using the donations. If those who donate do not receive anything in exchange for their contribution, what people donate is a gift and is not considered income and is not taxable. If the funds are going into an account in your name, you would be the one responsible for purchasing and distributing the diapers. Good luck with your project!

November 22, 2021

If my teenage son is creating a gofundme for educational purposes such as a school trip to WA & I choose to offer a free photoshoot on the side for anyone that donates a certain amt+, would his gofundme be taxable?

November 22, 2021

The donations from the donors who receive a photoshoot in exchange for their contributions could be taxable to your son (as the photoshoot would be considered a service). However, the answer to your specific situation would be based on your profession, the threshold you choose, etc. We would recommend checking with your local professional tax advisor. Thank you for your question.

November 23, 2020

If someone uses proceeds of a gofundme donation to pay for medical services services or prescriptions is that safe from taxes? What about food or transportation? Housing expenses like rent? Thank you

December 2, 2020

As long as the contributions to the Go Fund Me account are for individuals and the contributors do not receive anything in exchange for their contribution, what they give is a gift, nontaxable to the recipient and nondeductible by the donor. For income tax purposes it does not matter what gifted funds are expended for and there is no limit to the recipient for income tax purposes. Donor’s may have gift tax filing requirements depending upon the amount of the gift.

Although not an income tax issue, the GoFundMe criteria for fund payment should to be reviewed to confirm whether or not the pay-out is a valid expense in accordance with the intended use of the funds. According to GoFundMe, “Donations need to be used for the cause listed on the fundraiser. For this reason, it’s a good idea to be very clear with donors how their funds will be used.”

For the very rare situation when someone doesn’t use the funds as intended, there is a GoFundMe Guarantee. You can read more about it here: https://www.gofundme.com/c/safety/gofundme-guarantee

November 29, 2020

Hello. I have a cousin who needs an open heart surgery. He lives in Venezuela. He does not has money to cover the cost. The amount is 30.000 $. I live in New York. I want to open a gofundme to help him. Do you that I have to report taxes x this campaign? Thanks

December 2, 2020

If the recipient of the disbursement of the funds from Go Fund Me is not in the United States it is not a US income tax question for the recipient. You would need to contact a tax professional in the country of the recipient.

December 28, 2020

I am a retail business and I have a customer who wants to set up a GoFundMe to help pay rent and other associated expenses to stay afloat during these difficult times. I’ve read the article above and am unclear about the “if you are a business” under the Other Considerations section. Would proceeds be considered taxable income if no goods or services or ownership in the business were offered in exchange? Kindly clarify this for me.

Thank you!

January 4, 2021

Thank you for your question and we apologize for the delay with our response. Any business, whether or not they provide goods or services to the individuals putting funds into the GoFundMe account, will always be taxable on the amount received.

December 31, 2020

I have a situation and I need some advice. My cousin who was in her early 50’s passed away unexpectedly back in August 2020. Her mom (my aunt) who is about 75 y/o lives in section 8 housing. This aunt who was widowed in 2015 , also had her home of 40 years foreclosed on a week before Christmas of that same year. This same aunt, also became a caregiver to 2 small boys who she’s been raising since to this day, they are now 7 & 6 y/o . This same aunt was also diagnosed with double lung cancer about a month before my cousin died. I have to make this clear that my aunt was completely unprepared financially to bury a 50 yr old child before I can explain what happened.
So what happened is this, a member of our family (by marriage) was asked to create a Go Fund Me account on Facebook in the hope that we could get some help to cremate my cousin. The last time anyone noticed the amount , the account was over $400 , close to $450. When the donations stopped coming in the family member was asked to close the account and give the donations to my aunt so that she could pay off the funeral home since They were holding my cousins remains until the debt was fulfilled. This person as of today 12/30/20 is still refusing to give my aunt the funds. Me and several other family members had to come together and satisfy the $1600 balance at the funeral home , so that we could finally get my cousins remains home to my aunt where they belong. So one thing I’m confused about and need clarification is that the family member that is refusing to give the donations claims that the final balance of $400-$450 was taxed by Go Fund Me and that in addition to being taxed she was also required to pay fees to GoFundMe which she claims that the final amount after taxes and fees was $250. So for the sake of not arguing we accepted the lie of the money being $250 not $450 and have asked her to please give my aunt the $250. Even though the debt at the funeral home is now satisfied we urged her to please give my aunt the donations because the money would help my aunt with Christmas presents for the 2 boys she is caring for since 2015. This family member STILL refuses to give the money and again family members including myself had to come together so the boys would have a Christmas. So I need to know first: Is the Creator of a GoFundMe account taxed and charged fee’s in excess of over $200 for creating the account. And second: what action can be taken if the creator refuses to give the donation money to the person it was intended for. I mean, she basically lied to everyone and used everyone who donated good nature to pocket hundreds of dollars for herself. What can I do ?

December 31, 2020

We would recommend contacting GoFundMe directly, as your situation is very unique; we do not want to speculate and provide incorrect information. According to GoFundMe, “Donations need to be used for the cause listed on the fundraiser. For this reason, it’s a good idea to be very clear with donors how their funds will be used.” For the very rare situation when someone doesn’t use the funds as intended (which appears to be the case), there is a GoFundMe Guarantee. You can read more about it here: https://www.gofundme.com/c/safety/gofundme-guarantee. You can submit a claim and also ask questions. We have found them to be very responsive. Best of luck to you!

April 21, 2021

Hi, if I’m starting a health GoFundMe campaign do I have a limit (20k) before it is taxable? Or it does not apply to this?

April 22, 2021

Not being 100% clear on what a “health GoFundMe campaign” is, we have made the assumption you are seeking donations for healthcare expenses. Our answer is similar to most posted on this site. Be clear of your intentions on how to use the funds. As long as any contributors to the GoFundMe account do not receive anything in exchange for their contribution, what people donate is a gift and is nontaxable to you. You will not need to report it as income on your taxes and there is no limit to the recipient (you) for income tax purposes.

January 6, 2021

I have a business that is set up as an LLC and I am the sole proprietor. I have opened the business in defiance of our governor’s shut-down mandate. The cause I am trying to champion has more to do with personal liberty and freedom than anything to do with the business itself. I will be incurring potential fines and legal costs. People who support our cause have set up a legal defense fund for me. Are those funds a gift to the business and taxable or are they gifts to me (since the costs they are intended to cover will be coming out of my pocket and not the business)? As I say, the cause I am trying to champion has more to do with personal liberty and freedom than anything to do with the business itself. Contributors are clear that their support is for the cause and not necessarily in support of the business.

January 14, 2021

First, you will need clarification from your attorney as to who, in this scenario, would be incurring and liable for the legal fees and fines. Would the government be going after the owner of a business for the fines or would it be going after the legal business entity? If it is the business, the GoFundMe donations should be set up for the business and would be taxable to the business. If it would be you personally that would be incurring and liable for the legal fees and fines the GoFundMe donations would be gifts to you personally and nontaxable. Thank you for your question.

January 30, 2021

I was thinking about setting up a go fund me to get a nonprofit organization going. The organization will be for a sports clinic or inner city children. I would not charge any fees to the participants. The money collected would be for insurance, website, and equipment. All instructors would be volunteers. The only thing holding me back is the costs to set up a nonprofit organization, insurance and equipment. I thought maybe go fund me would be the way to go. I am wondering about taxes?

February 5, 2021

If you set up a GoFundMe account to collect monies to set up a not for profit organization, as long as you are not giving anything to the contributors in return for the contribution to the GoFundMe account, the contribution would be considered a gift to you. The funds would need to be used for their intended purpose. You must be very clear that any amounts contributed to the GoFundMe account are not qualified as deductible charitable contributions for tax purposes because they are not making a contribution to a charitable organization. A Section 501(c)(3) charitable organization does not yet exist and therefore no amounts would be considered contributions to it.

February 8, 2021

I run a support group four nights per week. It is not set up as a 501c3 non-profit. Members have been giving me donations via PayPal and GoFundMe. Would this money be taxable?

February 9, 2021

If the person paying money via PayPal or GoFundMe is receiving a benefit for the amount they have given, it is taxable to the recipient. If these individuals are attending the support group it would appear they are receiving a benefit by participating in the group and therefore the amount you receive would be taxable to you as the recipient of the funds. Thank you for your question.

February 10, 2021

One of my Husbands Family members business catch fire recently in Hondurans; it is a junkyard. They do not insurance junkyards in Hondurans because they are a high liability business. He would need at least 800,000 dollars to restore his business and pay for the damages caused by the fire. Would I be able start a GoFundMe account, or would it be a legalistic nightmare. I am the head of the household and the bread winner; I make around 50,000 before taxes. I make enough to pay the day to day expenditure for my household. It is a great tragedy; my husband’s Uncle had previously been in business for 19 years and he lost everything in the fire; I want to help but I do not want to harm myself in the process . Would starting this GoFundMe fundraising account be more harmful than good in this situation. I appreciate any feedback you can provide.

February 10, 2021

We are so sorry for your family member’s loss. Since the recipient of the funds from GoFundMe you wish to set up is not living/located in the United States, it unfortunately, is not a United States income tax question that we can answer in order to help. You would need to contact a tax professional in the country of the recipient to learn if taxes apply. We would also recommend using the ‘Get help’ button located at the bottom of this GoFundMe page: https://support.gofundme.com/hc/en-us and then follow the prompts. It will give you an option to directly email your question to them. They are generally very responsive. Best of luck to you and your family.

February 11, 2021

My daughter is in need of a heart and liver transplant. We set up a GOFUNDME account and held a fundraising event. We also received a large donation from a program created by the former CEO of my company that extends a “Helping Hand” to former employees and there families in need. The donations are to be used to provide care and pay medical expenses for my daughter. The donations from all sources totaled around 100K. We were advised to open a “Business Account” at the bank in which to deposit the funds. The only expenditures have been to pay for medical treatment or expenses to receive medical treatment (We rented an RV to travel to California for treatment). This is the first year for taxes and don’t know what we have to do for tax purposes. We asked several accountants but none of them knew how to handle this. Any guidance would be greatly appreciated

February 12, 2021

For tax purposes as it relates to GoFundMe donations, as long as the contributions to the GoFundMe account are for an individual (your daughter) and the contributors do not receive anything in exchange for their contribution, what they give is a gift, nontaxable to the recipient (in this case you) and nondeductible by the donor. For income tax purposes it does not matter what gifted funds are expended for and there is no limit to the recipient (you) for income tax purposes. GoFundMe does state that “Donations need to be used for the cause listed on the fundraiser”.

You will want to verify that your employer donated with the intent of giving a gift (also nontaxable) and not as other wages paid in connection with your employment, which they would include on your Form W-2.

Medical expenses and other deductions are not covered in our answer. You may want to seek the services of an accountant who will help you prepare your taxes should they be more complex this year due to your situation. We wish your daughter and you all the best.

February 19, 2021

I received $20,000 in donations from GoFundMe to help with expenses for me and my kids due to me going through cancer treatment and being unemployed. Do I have to file this with my taxes?

February 19, 2021

According to GoFundMe, “Donations need to be used for the cause listed on the fundraiser.” As long as the $20,000 in contributions to the Go Fund Me account was set up for you and your children and those who donated did not receive anything in exchange for their contribution, what they gave is a gift and is nontaxable to you. Therefore there is no need to report it as income.

March 8, 2021

I would like to raise money to buy several hectares of land in Africa to expand the RESERVES for the wild animals.
The animals are being encroached and crowded by the huge farm industries, and many times their prey is cut off from them by the fences, so they roam into villages trying to get around the fences. Land is being purchased quickly now and not all land is good because it must have water supplies and habitats for the animals. I want to buy land that is adjacent to other RESERVES, and some is now available.
I need guidance about starting a campaign on GOFUNDME.

March 8, 2021

Unfortunately, like the previous question, when raising funds for use outside the U.S. it is outside our area of expertise. We suggest contacting GoFundMe directly by using the ‘Get help’ button located at the bottom of this GoFundMe page: https://support.gofundme.com/hc/en-us and then follow the prompts. It will give you an option to directly email your question to them. We trust they can advise you best. Thank you.

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March 9, 2021

My daughter who is 16 would like to provide monthly birthday parties for children living in residential foster homes. Her struggle is how to raise the funds to do this. We have considered starting a GoFundMe page for this. As parents, our concern with GoFundMe is whether or not any money she would receive through GoFundMe would have to be reported in a shape or fashion on her’s/our taxes. Please advise.

March 15, 2021

Should you decide to use GoFundMe, you/your daughter needs to be clear on how the funds will be used when she sets up her fundraiser. Follow GoFundMe rule that ” “Donations need to be used for the cause listed on the fundraiser.” As long as any contributions to the GoFundMe account are used as she indicates and that those who donate do not receive anything in exchange for their contribution, what people donate is a gift and is nontaxable to her. She will not need to report it as income on her taxes.

April 7, 2021

Are there tax liabilities for the organizer of a Go Fund Me? What if the organizer is the one that who withdraws the funds for the recipient?
Thanks

May 28, 2021

As long as any contributions to the GoFundMe account are used as indicated clearly in the description (not for business use), and those who donate do not receive anything in exchange for their contribution, what people donate is a gift and is nontaxable. You will not need to report it as income on your taxes, whether you are the organizer or the recipient. However, if the organizer withdraws the amount and they give the money to the recipient, the IRS may consider it a gift from the organizer to the recipient. If it is, the organizer may have to file a gift tax return if the annual amount exceeds the filing requirements. It is better to have the recipient access the funds directly.

March 10, 2021

Hi, this is not nessacarily a go-fund-me question, but is similar. My sister recieved a heart transplant last year and we organized a benefit event for her. About half of the proceeds were from live and silent autions the other was from 50/50 raffles and dinner donations. We set up an EIN number before getting started. The bank that set up the account also applied for the EIN for us. They said it was setup as an Unicorperated Association, as per thier Compliance Officers guidence, with myself and one other person as Agents. We are prepaing to get the taxes done and the preparer is unsure about the EIN Classification and we are now concerend she or we might have a bigger tax liability than expected. Questions we have are; would only the auction proceeds, which we have records of the exact amount, still be the only taxable amout as if it was a gift to her but just buy the Association and not directly the patrons? Also I have read that since the proceeds benifited an individual (we have been paying her expenses directly from the accout for her) the EIN may be required to be switched to a partnership, even though the Partners did not profit from the Association. In that case will it the entire portion become a tax liability for her or either of the Agents the would become the Partners? The reason we went with an EIN was one, to try and isolate the taxes from hers or our personal taxes and also to try and recieve donations from larger contributors for the auction items. It seems in tring to keep the taxes simple, we made it a lot mor complicated. I hope this is clear enough on the situatuation and look forward to any advice you can help with. Thank you.

March 15, 2021

Thank you for reading our article. Unfortunately, your questions are outside the scope of our GoFundMe post and would require research, as we are not familiar with your unique situation. If you wish to engage our services, please contact us directly. Perhaps your current tax preparer can further research and assist you. We hope your sister is doing well.

March 16, 2021

I friend of mine has a business that was closed during the pandemic. She owes money in rent otherwise she will lose her business in May when the lease is up. If I set up and account for her and people donate money does it affect me in any way?

March 16, 2021

It should not affect you as long as you use the funds as stated when you set up her fundraiser. Follow GoFundMe rule that “Donations need to be used for the cause listed on the fundraiser.” If donations are used for her business, she will need to report it as income on her tax return. You should set up the funds to deposit into your friend’s bank account and not your own. Good luck to your friend. What a kind gesture.

March 25, 2021

A beloved local restaurant is closed due to the pandemic and now wants to sell. He has a little debt, and we also want to help him raise money to reopen..easier to sell a business that is operating.

Would the projected $100K goal be taxable for him? People would just DONATE.

May 28, 2021

If the amounts deposited in the account are designated to repay personal debt, as long as any contributions to the GoFundMe account are used as indicated clearly in the description (not for business use), and those who donate do not receive anything in exchange for their contribution, what people donate is a gift and is nontaxable. If the debt however, is a business debt, the amounts distributed from the account will be taxable to the business. If donations are used for his business, to help reopen, he will need to report it as income on his tax return. Thank you for your question and best of luck to him.

April 13, 2021

If I set up a GoFundMe account to legally change my name. Would I have to put that money on taxes or IRS?

April 22, 2021

As long as you are clear on how the funds will be used when you set up your fundraiser (follow GoFundMe rule that ” “Donations need to be used for the cause listed on the fundraiser.”), and as long no one who donates receives anything in exchange for their contribution, what people donate is a gift and is nontaxable to you. You will not need to report it as income on your taxes.

April 16, 2021

Our Middle School teacher set up to accounts on Facebook to raise money for area residents during Covid. He bought food, etc for them. He know claims he received a 1099k from FAcebook and was told by an attorney and a CPA that he had to pay taxes on them. I don’t think this is correct? What is your opinion. Also he did not give more than one person more than 15,000 dollars

April 30, 2021

Unfortunately, we are not familiar with FaceBook practices with regards to raising money. Based on this link https://www.facebook.com/help/388137821570791 Facebook sends a 1099 form to anyone who raises more than $20,000. The attorney and CPA in his state (that he consulted with) may have information specific to his situation and can provide him with the most accurate information based on the amount received, use of the funds based on where he lives. We would recommend asking further questions of the attorney and CPA for clarification.

May 2, 2021

One of my friends at church, an 80 year old gentleman and his wife, were just scammed and their bank accounts emptied of their entire life savings of about $85,000, about half of which had actually been received as proceeds from a deceased friend. Needless to say, he made a huge mistake in giving in to the badgering and threats he received. Is this a reasonable GOFUNDME campaign, to replace as much as possible of their lost lifetime savings? That is a lot of money to try and recover, but when you are 80 and have limited earnings capabilities, it could be the only thing standing between meeting their needs and possibly homelessness.

May 28, 2021

A GoFundMe can be set up for any number of reasons and is not for us to say which is best. It is certainly a thoughtful gesture on your part to want to help this couple. If you choose to proceed, just be sure to follow GoFundMe guidelines and be clear of the intent of the campaign.

May 4, 2021

Good morning! Even though the money collected through GoFundme is not taxable, do I still have to report it. If so, how do I report it? I made a campaign to pay for medical expenses of a Professor and reviewed 10.000$ last year. When filling my taxes this year, where should I add this info? Thanks!

May 28, 2021

As the organizer, not the recipient of the GoFundme monies you would not have any income tax reporting requirement. If the recipient uses the funds as indicated, and donors did not receive anything in exchange for their donations, they do not need to report the funds as income. If you, as the organizer, withdrew the monies and gave it to the Professor, the IRS may consider it a gift from the organizer to the recipient. If it is, the organizer may have to file a gift tax return if the annual amount exceeds the filing requirements.

May 20, 2021

My husband has been working with several other people for a few months to try to help an unjustly imprisoned person in state prison in Louisiana to get legal representation. They are not any kind of formally registered charity organization or anything like that, just a group of people trying to help. They live in different states. As part of this process they set up a go-fund-me to raise money to pay a lawyer if they can find one willing to work on the case. They have raised approx $13K in donations and have not yet found a lawyer willing to take the case, so they have not spent any of the money. However, Go-fund-Me insisted that they had to take some of the money out of their system. So one of the members received $7K and put it into a savings account in her name where it sits now. They are trying to figure out the correct way to hold the money so that none of the group members or the prisoner end up in trouble with the IRS. They are thinking of setting up a joint checking account in the name of 2 group members to hold the money. After reading your posts it seems like there are no tax reporting requirements or IRS documents to file because this money would be considered a gift. Do you know if they need to do anything special in setting up a bank account to hold the money–ie, should they name it a legal fund or do anything else to keep everything above-board? Would appreciate any advice! Thank you!

May 28, 2021

If those who donate do not receive anything in exchange for their contribution, what people donate is a gift and is nontaxable. Since the monies didn’t directly go to the recipient or on their behalf, the IRS may consider it a gift from the organizers to the recipient when services are paid for on their behalf. If it is, the organizer may have to file a gift tax return if the annual amount exceeds the filing requirements. If an account is set up in anyone’s name, any income earned on the bank account will be taxable to those listed on the account. Other than the interest income being taxed to those listed on the account, there are no income tax implications regarding the names on the account. Any non-tax implications, if any, are outside of the scope of the GoFundme discussion. Best of luck.

May 20, 2021

Thank you for this article and your replies to questions. It is very helpful for you to take your time. I appreciate it.

May 20, 2021

I am purchasing a house that is on the National Register of Historic Properties. It has been vacant for 12 years, so it needs a lot of work. I am interested in doing a gofundme to make the specific repairs. I plan on documenting everything. Will my purchases for the house from the fund be taxed? Should my gofunme be broken down into smaller group donations, i.e. 1. furnace, 2. hot water tank, 3. electrical,
4. slate roof, 5. driveway, etc.

May 28, 2021

Whether or not the purchases for your home are taxed (we are assuming you are referring to sales tax) is unfortunately outside of the scope of the GoFundMe discussion. If you are asking whether or not the amounts taken from the fund are taxable to you, as long as any contributions to the GoFundMe account are used as indicated clearly in the description (not for business use), and those who donate do not receive anything in exchange for their contribution, what people donate is a gift and is nontaxable to you. As for whether or not your GoFundMe should be in smaller groups is completely up to you. We are not sure of the benefit of having multiple smaller group donations, but that is a personal choice. Good luck with your historic home renovations!

May 28, 2021

I’m considering a GoFundMe to start a local business, as with my student debt, I am unable to obtain any loans to get a property. I’m looking at around $50k. What would that look like in terms of taxes? Thank you!

May 28, 2021

If you set up a go fund me account to pay off student loans there would be no tax ramifications to the recipient as long as the donors do not receive anything in exchange for their ‘gift’. If you set up a go fund me account to start a business it will need to be reported on the business as income. Best of luck on your business endeavor.

June 16, 2021

A pastor friend recently passed away unexpectedly following an accident. A friend of the family set up a go fund me account shortly after the accident to help his wife cover medical expenses. After the account was set up and some donations were received, the pastor died of his injury. The organizer later changed the goals to include funeral expenses and to start a fund that would train people in areas that the pastor was passionate about. Reading through the questions above it is clear that the gifts would not be taxable income to the wife. If the wife set up this training fund through a church, would she be able to claim the amount donated to the fund as a charitable gift?

June 17, 2021

If the goals were changed thru GoFundMe to allow the monies to be used for the training and the money is donated to the church where the church controls the training program, the wife can take a charitable deduction. The church must be in control of the monies and the program. Thank you for your question.

October 4, 2021

If a parent or family member donated to a GoFundMe recipient (son or grandchild) of over $100,000 and received nothing in return, I understand that they may have to file certain tax forms with the government but would it end up being a taxable amount to either the recipient or the donor?

October 5, 2021

The contribution of over $100,000 as a single donation would be categorized as a gift and would not be taxable to the recipient since nothing was received in exchange. However, because the contribution exceeds the “annual gift tax exclusion” ($15,000 per donee per year), the parent or family member making the gift may be subject to filing a federal gift tax return (IRS Form 709) to report the gift. Whether or not a gift tax would be due depends on the parent’s or family member’s specific circumstances.

October 10, 2021

If I were to create a gofundme that people could donate to a fund that I would use to help pay off student loan debts, help with housing, and donate to communities for shelters, food, etc.

Would that be considered non taxable or would I be responsible to pay taxes?

October 12, 2021

Be clear when you set up your fundraiser and follow GoFundMe rules that ” “Donations need to be used for the cause listed on the fundraiser.” As long as contributions to your GoFundMe account are used as you indicate and those who donate do not receive anything in exchange for their contribution, what they gave is a gift and is nontaxable to you. However, if any donor makes a contribution that exceeds $15,000 (the “annual gift tax exclusion”, that donor may be subject to filing a federal gift tax return (IRS Form 709) to report the gift. Whether or not a gift tax would be due depends on the donor’s specific circumstances.

October 26, 2021

Hello! If someone provides completely free services (no requirement or expectation of payment or donation) but mentions their GoFundMe account (both to the service’s recipients and to many others who don’t receive services), are the GoFundMe donations taxable? Thanks so much!

November 1, 2021

We would need to know what type of services are being provided for additional clarification before we can answer your question. Thank you.

November 4, 2021

Hi! I’m thinking of starting a GoFundMe campaign so my friends and family can donate money to buy my first house. The thing is, most of them live outside the USA (Dominican Republic, Denmark, Spain). What happens if their donations exceed the $15,000? And also, is there a limit on how much money you can receive as a gift without paying taxes? Thank you!

November 5, 2021

Gifts made from U.S. individuals to you should not be taxable and you will not need to report it as income on your taxes; there is no limit to the recipient (you) for income tax purposes. However, we are unable to provide advice with respect to gifts made from outside of the United States, as it is beyond the scope of this article. We suggest contacting GoFundMe directly by using the ‘Get help’ button located at the bottom of their GoFundMe page: https://support.gofundme.com/hc/en-us and then follow the prompts. It will give you an option to directly email your question to them. We trust they can advise you best.

November 22, 2021

Hi,
My husband has recently been diagnosed with high-risk, metastatic prostate cancer. He will have surgery in about two weeks, but this is not a guarantee that the cancer will not be found elsewhere (thankfully, pre-surgical scans are good, so far.) He is self-employed and has a high-deductible insurance plan. After surgery, he cannot work for 4-6 weeks, and he is usually a one man show (sometimes with a helper.) He is a carpenter who does mainly residential remodeling jobs, so the pandemic has also affected his work in the past year. As of today, he has already accumulated over $7,000 in costs for this cancer and hasn’t even had the surgery yet. We want to try to crowdfund to offset the medical costs and income loss in some way. I understand that gofundme will send a 1099K for the total of the donations, and that we may be able to treat these as gifts up to a certain amount.

How do we do this when filing? What is the upper limit of donations we can claim as gifts for this funding?

Thank you!!

November 22, 2021

Sorry to hear about your husband. As long as donors do not receive anything in exchange for their donations, you do not have to report the funds received as income on your federal return. Per IRS requirements, the third-party payment network must issue a Form 1099-K when the total number of transactions exceeds 200 and the total value exceeds $20,000. Although when reported on Form 1099-K, these amounts are generally still considered personal gifts and would be excludable from your gross income. To be proactive and avoid issues with the IRS, GoFundMe recipients who receive a Form 1099-K should report all GoFundMe proceeds as “Other Income,” and then separately show a reduction of that amount along with an explanation that the amounts received were gifts. Please note that individuals who contribute more than the yearly gift exclusion amount to an individual ($15,000 for single taxpayers and $30,000 for married taxpayers filing jointly for the 2020 tax year) should file the required gift tax return. It is always best to check with a tax professional in your state to be certain there are no additional reporting requirements. Best of luck to you and your husband.

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