Kansas Department of Administration, Office of General Services
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Accounts and Reports

DATE:  January 24, 2007
SUBJECT: Recordkeeping Requirement for Charitable Contributions Made by Payroll Deduction
EFFECTIVE DATE:   Taxable years beginning after August 17, 2006
A & R CONTACT: Janice Wolfley     (785) 296-3699     (Janice.Wolfley@da.ks.gov)
APPROVAL: director's signature
SUMMARY: Recordkeeping Requirement for Charitable Contributions Made by Payroll Deduction

Taxpayers claiming charitable contributions for cash, check, or other monetary gifts made in taxable years beginning after August 17, 2006, are subject to the recordkeeping requirements of Sec. 170(f)(17), as added by section 1217 of the Pension Protection Act of 2006, Public Law 109-280, 120 Stat. 780(2006)(PPA).  IRS Notice 2006-110 provides guidance on how charitable contributions made by payroll deduction may meet the requirements of Sec. 170(f)(17) of the Internal Revenue Code.

Sec. 170(f)(17) of the Internal Revenue Code indicates that charitable contribution deductions of $250 or more withheld from each payment of wages must be substantiated in order to be a valid tax deduction effective for calendar year 2007.  Substantiation requirements include a pay stub furnished by the employer that sets forth the amount withheld and a pledge card or other document prepared by the donee organization that includes a statement that the organization does not provide goods or services in whole or partial consideration for any contribution made to the organization by payroll deduction.  Currently, any payroll deductions withheld by the State of Kansas for United Way or Community Health Charities (CHC) are printed on the paycheck stubs and included on the paycheck view in self service.  United Way and CHC are responsible for the pledge cards or other documents with the proper information included.  Employees with a payroll deduction of $250 or more per pay period should keep their pay stub or print their self service paycheck with the deduction amount, and retain a copy of the pledge card or other document provided by United Way or CHC to fulfill these requirements.

There are currently no United Way or CHC deductions in SHARP which are equal to or greater than $250 per period.  However, agencies should advise employees of the record keeping requirements for charitable contributions in the event an employee’s deduction meets or exceeds $250 per period.

Regent’s institutions are responsible for ensuring that the requirements are met within their individuals systems.