Car Donation Tax Deduction

Tax Deduction at a Glance


The IRS allows you to claim a tax deduction of the amount the car sold for. Your tax-deductible receipt will be for the car's full sale price.


You can claim the fair market value of the car, up to $500. According to the IRS, it is up to you to determine the fair market value of your car.

Our experienced market experts work hard to get you the highest possible deduction by negotiating for the best sale price of your car.

Man donating a car and receiving saings from a tax deduction

How do tax deductions for car donations work?

You can receive a tax deduction by following these four simple steps.

First step icon showing two hands and a heart representing a non-profit organization

Step 1: Donate to a registered nonprofit.

The most important consideration when choosing a charity is determining its "exempt" status. To be eligible for a tax deduction, the car must be donated to a tax-exempt nonprofit organization, most commonly known as a 501(c)(3) organization.
To verify if an organization is tax-exempt, use the IRS search tool, or ask to see the organization’s IRS letter recognizing it as tax-exempt.

Kars4Kids is a nationally recognized 501(c)(3) organization. Our Tax ID number is 22-3746050.

Second step icon showing a scissor cutting through money representing a tax deduction

Step 2: Determine the deduction amount.

According to the IRS -

If the charity sells your car for more than $500:
You can claim the full sale price for your tax deduction.
If the charity sells your car for less than $500:
You can claim the fair market value up to a maximum of $500.
Sometimes a charity may use the vehicle for its own use. In such a case, you can claim the fair market value for the car.

Kars4Kids does not retain possession of its cars and will always work to receive the highest possible sale price.

Third step icon showing files representing filing taxes and claiming a tax deduction

Step 3: File taxes and claim deductions.

If your car is sold for less than $500:
All that is needed is to write the deduction amount on your IRS 1040 Form.
If your car sold for more than $500:
1. IRS Form 1098-c. Many charities, like Kars4Kids, provide a receipt that can be used in place of the 1098.
2. IRS Form 8283 Section A
3. For e-filing - Form 8453
If your car is sold for more than $5,000:
1. IRS Form 8283
2. IRS Form 1098-c or legal receipt from charity
Fourth step icon showing paper records representing keeping records for future reference

Step 4: Keep records.

The IRS requires you to retain the following information for your records:
1. Name and address of charity
2. Date of donation
3. Place where you donated your vehicle
4. Description of vehicle (year, make, and model)
5. Written acknowledgment or legal receipt from charity (when sold for more than $500)

The receipt you’ll receive from Kars4Kids contains all the above information and is all the documentation you’ll need.

For a more detailed guide, check out the Kars4Kids Donor's Guide to Car Donation Tax Deduction.

We're here to help!

Kars4kids is a classified 501(c)(3) charity organization. You can check with your tax advisor or accountant to determine the amount of your benefit.The deduction is of value only if the donor itemizes his or her deductions. For a more detailed overview the IRS publishes a Donors Guide to Car Donation.