Vehicle Donations

Sometimes a simple lack of transportation can be the
final critical obstacle in a person’s ability to get a job.
Goodwill’s Wheels-to-Work Program was created to fill
that gap — connecting donated vehicles to low-income
persons in need of reliable transportation in order to
maintain or obtain employment.

Tax benefits
Auto donors can still deduct fair market value if their car is used in the program. Since new, stricter tax laws took
effect on January 1, 2005, autos donated to Goodwill
have plummeted. In part, this is due to confusion about
the new guidelines. Previously, a donor could deduct the
fair market value of a car given to charity. Under the new
law, if the claimed value of the donated vehicle exceeds
$500 and the item is sold by the charitable organization,
the taxpayer deduction is limited to the gross proceeds
from the sale. There is, however, a critical exception.
Cars selected and used in programs such as Goodwill’s Wheels-to-Work ARE eligible for the fair market value deduction.

An excerpt from the IRS’ own guidelines regarding auto
donations to charities states: “Donors MAY claim a
deduction of the vehicle’s fair market value IF the charity
donates or sells the vehicle to a needy individual at a
significantly below-market price, if the transfer furthers
the charitable purpose of helping a poor person in need
of a means of transportation.”

Vehicles that are not suitable for the program are sold to
the general public and the proceeds are channeled back
into Goodwill’s mission. In these instances, donors may
only claim the gross proceeds from the sale.

Instead of trade-in, consider donating your vehicle to Goodwill!

More Info
For more information,
please review the Internal
Revenue Service
publication:
A Donor's Guide to Car
Donations (PDF 179K)