USPS postmark charitable donations can create unexpected challenges for both nonprofits and donors at year-end. As December 31 approaches, organizations and individuals focus on ensuring gifts are properly recorded for tax purposes, but USPS mail processing timing can affect when a donation is officially recognized.
Understanding how USPS postmarks work—and taking proactive steps—can help both nonprofits and donors avoid unintended tax and reporting complications.
Understanding USPS Postmark Rules for Charitable Donations
Under IRS guidelines, the “mailbox rule” applies to USPS postmark charitable donations sent through the U.S. Postal Service. This rule states that a donation is considered made on the date shown on the USPS postmark—not the date the check was written or the date the donor intended to mail it.
According to the IRS mailbox rule for charitable contributions, a contribution mailed before year-end can qualify for that tax year only if the postmark reflects a December mailing date.
In recent years, USPS processing delays have created situations where envelopes mailed on or before December 31 are not processed until January 1 or later. When this occurs, the postmark may reflect the new tax year, even though the donor mailed the contribution before year-end.
This timing discrepancy can impact:
- Donors, who may lose the intended tax deduction for the prior year
- Nonprofits, which may need to record the contribution in a different fiscal period than expected
Because of this risk, nonprofits should proactively educate donors and strengthen their year-end gift processing procedures.
For additional background, the USPS provides guidance on how postmarks are applied and processed in its USPS postmark guidelines.
Recommended Steps for Donors
Donors who want to ensure their charitable contributions are credited to the correct tax year should consider the following precautions:
- Request a hand-stamped postmark at a USPS counter to ensure the actual mailing date is recorded.
- Purchase postage at the counter, where USPS-printed labels reflect the official acceptance date.
- Use certified or registered mail, which provides formal documentation and tracking that clearly establishes the mailing date.
In addition, donors should be aware of IRS charitable contribution substantiation requirements. Proper handling of charitable donation postmark timing is critical to supporting deductions and avoiding issues during tax filing.
Recommended Steps for Nonprofits
Nonprofits can reduce risk and improve compliance by implementing stronger year-end controls:
- Retain envelopes with donations when mail is processed manually, ensuring postmark dates are visible and stored with contribution records.
- Confirm lockbox or automated processors scan full envelopes and retain images with legible postmarks available for review.
- Perform an additional year-end cutoff review for donations received in the weeks following December 31 to confirm proper recording.
- Avoid using check dates to determine the fiscal year of a contribution, as checks can be backdated.
- Maintain accessible documentation supporting year-end gift recognition, as revenue cutoff testing is a common focus during annual financial statement audits.
Clear documentation and consistent processes help nonprofits defend revenue recognition decisions and reduce audit risk related to postmark timing.
How Reckenen Supports Strong Year-End Processes
When postmark dates do not align with donor intent, both nonprofits and individual taxpayers may encounter challenges related to tax compliance, documentation, and reporting. Reckenen provides tax planning, compliance, and advisory services designed to help both nonprofit organizations and individual donors navigate these complexities with confidence.
For nonprofit organizations, Reckenen works closely with finance and leadership teams to support proper contribution recognition, strengthen internal controls around year-end cutoffs, and prepare clear, well-documented records that stand up to audit scrutiny. This includes guidance on revenue recognition policies, documentation retention, and coordination with third-party processors.
- Learn more about Reckenen’s Tax Services for Nonprofit Organizations
For individual donors, Reckenen’s tax professionals offer year-end tax planning and compliance services, including guidance on charitable contribution substantiation and donation timing, to help ensure deductions are properly supported and reported in accordance with IRS requirements.
- Explore Reckenen’s Individual Tax Planning & Compliance Services
- Contact Reckenen to discuss your year-end tax and compliance needs