Did donating a car to charity create a deduction or other tax benefit on a New Jersey Gross Income Tax return?

Plain-English summary

A charitable car donation could qualify for a federal deduction, but it produced no deduction or other benefit on the New Jersey Gross Income Tax return.

The TAM explained that federal law allowed a taxpayer to claim a qualifying vehicle donation as an itemized charitable deduction. New Jersey's Gross Income Tax Act did not contain a comparable charitable-deduction provision.

The federal eligibility, valuation, and donor-responsibility rules therefore did not create a New Jersey deduction.

What this means for you

New Jersey donors

Keep the federal documentation for the federal return, but do not carry the charitable vehicle deduction onto the New Jersey return under this TAM.

Tax preparers

This is a direct federal-state difference: federal deductibility did not imply New Jersey deductibility.

Common questions

Q: Did a federally deductible car donation reduce New Jersey income?
A: No.

Q: Did the charity's federal § 501(c)(3) status create a New Jersey deduction?
A: No. It related to federal eligibility only in this TAM.

Q: Was any New Jersey income-tax benefit available?
A: No.

Citations and references

• I.R.C. § 170(c) — eligible charitable organizations referenced in the TAM
• IRS Publication 4303 — vehicle donations, referenced in the TAM

Source

• Landing page: https://www.nj.gov/treasury/taxation/tam-pubs.shtml
• Original PDF: https://www.nj.gov/treasury/taxation/pdf/pubs/tams/tam5.pdf

Original ruling text

Donating Cars to Charities
TAM - 2010- 5 – Issued December 10, 2010
Tax: Gross Income Tax
For Federal Income Tax purposes, a taxpayer can take an income tax deduction on Schedule A of
Federal Form 1040 for donating a car to charity. To qualify for the deduction, the taxpayer
generally checks out the charity to see if it qualifies for IRS 501(c)(3) status; estimates the value
of the vehicle; and sees what his or her responsibilities are as a donor.
However, the New Jersey Gross Income Tax Act does not have provisions similar to the Federal
Income Tax law regarding charitable deductions, and the taxpayer may not take a deduction on
any New Jersey Gross Income Tax return.
Therefore, donating a car to a charity is only a Federal Income tax issue; there is no tax benefit
available for New Jersey income tax.
The Internal Revenue Service provides information for individuals who donate their vehicles in
IRS Publication 4303, available at: http://www.irs.gov/pub/irs-pdf/p4303.pdf. Also, IRS
Publication 78, Cumulative List of Organization described in Section 170(c) of the Internal
Revenue Code of 1986, is an online list of organizations eligible to receive tax-deductible
charitable contributions and is available at: http://www.irs.gov/app/pub-78/.

Note: A Technical Advisory Memorandum (“TAM”) is an informational statement of the law,
regulations, or Division policies. It is accurate on the date issued. Subsequent changes in the law
or regulations, judicial decisions or changes in Division policies could affect the validity of the
information presented in a TAM.

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