GoFundMe donations are taxable income in most cases

Money you receive through GoFundMe is generally treated as taxable income by the IRS, with a few narrow exceptions. The platform itself does not withhold taxes, and GoFundMe does not report most donations to the IRS on your behalf. This means you are responsible for reporting the income when you file your tax return — and for paying taxes on it if you owe them.

The key distinction is whether the money is a gift or income. Gifts are not taxable to the person who receives them. But most GoFundMe campaigns raise money for a specific purpose — medical bills, funeral costs, disaster recovery, business startup — and that purpose makes the IRS treat the money as income rather than a gift. The person who started the campaign is the one who owes the tax, not the donors.

There are exceptions. Money raised for a medical emergency, funeral, or disaster relief may may have access to as a gift if the donors gave it out of personal affection or moral obligation rather than as payment for goods or services. But the IRS does not have a straightforward rule for this, and the distinction depends on the facts of your specific situation.

Key Takeaways

  • GoFundMe money is usually taxable income to the person who started the campaign, not to the donors who gave it.
  • The platform does not withhold taxes or report most donations to the IRS, so you must report the income yourself on your tax return.
  • Money raised for medical expenses, funerals, or disaster relief may be treated as a non-taxable gift, but only if donors gave it out of personal affection rather than as payment.
  • If you received more than $20,000 and had more than 200 transactions in a calendar year, GoFundMe will send you a Form 1099-K, which the IRS also receives.
  • Keeping records of what the money was used for and why you started the campaign will help you document your position if the IRS questions the income.

When GoFundMe money counts as a gift

The IRS does not tax gifts. A gift is money given out of generosity, without expecting anything in return. If your family and friends donated to your GoFundMe because they care about you and wanted to help — not because you promised them something or because they were paying for a service — the IRS may treat it as a gift.

This is most likely to work for campaigns that raise money for a medical emergency, funeral, or disaster. If your house burned down and your community donated to help you rebuild, or if you had unexpected surgery and friends contributed to cover your hospital bills, those donations look like gifts to the IRS. The donors were not buying anything; they were helping you through a hardship.

The problem is that the IRS does not have a bright-line rule. It looks at the facts: Did the donors know you personally? Did they give because they wanted to help you, or because they were paying for something? Was there any expectation of repayment or return? The more the campaign looks like a personal appeal to people who care about you, the stronger your case that it was a gift.

When GoFundMe money is taxable income

If you started a GoFundMe to raise money for a business, a creative project, a cause, or anything else that is not a personal hardship, the IRS treats it as income. The same is true if you offered donors something in return — a product, a service, a reward, or recognition. Once money changes hands in exchange for value, it is income, not a gift.

Examples of taxable GoFundMe campaigns include raising money to start a business, fund a book or film, pay for a trip or education, or support a nonprofit or cause. Even if you call it a "fundraiser," if you are collecting money for a purpose other than covering an unexpected personal hardship, you owe income tax on it.

If your campaign offered perks — donors who gave $50 got a t-shirt, donors who gave $500 got their name in the credits — that money is definitely taxable income. You received something of value in exchange, which makes it a transaction, not a gift.

How to report GoFundMe income on your tax return

If you owe tax on your GoFundMe money, you report it on your federal tax return. The form you use depends on what the money was for. If it was income from a business or self-employment, you report it on Schedule C (Profit or Loss from Business). If it was a one-time fundraiser that does not fit that category, you may report it as miscellaneous income on Schedule 1 (Additional Income and Adjustments to Income).

Keep records of how much you raised, when you raised it, and what you used the money for. If the IRS questions your return, you will need to show that the money was either a gift (and therefore not taxable) or that you reported the correct amount of income. A spreadsheet or folder with your GoFundMe campaign details, bank deposits, and receipts for how you spent the money will help you defend your position.

If you are unsure whether your campaign is taxable, or if you received a large amount and want to be safe, consider talking to a tax professional. They can look at your specific situation and tell you what to report.

Form 1099-K and when GoFundMe reports to the IRS

GoFundMe sends a Form 1099-K to the IRS and to you if you received more than $20,000 in a calendar year and had more than 200 transactions. This form reports the total amount of money that moved through your account. If you receive one, the IRS has already seen the number, so you must report at least that amount on your tax return.

Not all GoFundMe campaigns trigger a 1099-K. If you received $15,000 or had only 50 transactions, you will not get one. But that does not mean the income is not taxable — it just means GoFundMe did not report it to the IRS. You still owe tax on it, and you should still report it on your return.

If you receive a 1099-K and you believe the money was a non-taxable gift, you can still report it that way on your return. You may need to attach a note explaining why the income should not be taxed. Again, a tax professional can help you decide whether to do this and how to document it.

State taxes on GoFundMe money

In addition to federal income tax, you may owe state income tax on GoFundMe money. Most states tax income the same way the federal government does, so if the money is taxable federally, it is usually taxable at the state level too. A few states do not have an income tax, so residents of those states would not owe state tax even if they owe federal tax.

If you live in a state with income tax and you owe federal tax on your GoFundMe money, file your state return and report the same income. The rules are similar: gifts are not taxable, but income from fundraisers, businesses, and projects is.

What to do if you already received GoFundMe money and did not report it

If you received GoFundMe money in a previous year and did not report it on your tax return, you have options. The safest choice is to file an amended return for that year, reporting the income now. The IRS charges interest on unpaid taxes, and it may charge a penalty for filing late, but filing an amended return voluntarily is better than waiting for the IRS to find the unreported income.

If the amount was small and you did not receive a 1099-K, the risk of the IRS catching it is lower. But if you received a large amount or got a 1099-K, the IRS has a record and may contact you. Filing an amended return before that happens shows good faith and usually results in a smaller penalty.

Talk to a tax professional if you are unsure whether you need to amend a return or how much you owe. They can calculate your liability and help you file correctly.

Frequently Asked Questions

Do the people who donated to my GoFundMe have to pay taxes on their donation?

No. Donors do not pay taxes on money they give away. Gifts are not taxable income to the person who receives them, and they are not deductible for the person who gives them (unless the donation goes to a registered charity). Only the person who started the campaign and received the money owes tax on it.

If I raised money for medical bills, do I have to pay taxes on it?

Not necessarily. Money raised to cover medical expenses may be treated as a non-taxable gift if the donors gave it out of personal affection rather than as payment. But you will need to show that the donors were motivated by wanting to help you, not by any expectation of return. Keep records of your campaign and how you spent the money.

What if I raised money but did not use it for what I said?

If you raised money for one purpose and spent it on something else, that does not change whether it is taxable. The money is still income or a gift depending on the circumstances of the fundraiser itself. However, if donors gave money specifically for a stated purpose and you used it differently, you may have legal issues separate from taxes. Consult a lawyer if this applies to you.

Do I have to report GoFundMe money if I received less than $20,000?

Yes, if the money is taxable income. The $20,000 threshold only determines whether GoFundMe sends you a 1099-K. You still owe tax on all taxable income, regardless of the amount. The IRS expects you to report it on your return.

Can I deduct my expenses from the GoFundMe money I received?

If the money is taxable income, you may be able to deduct expenses related to what you raised the money for — but only if it qualifies as a business or self-employment activity. If you raised money for a personal hardship and it is treated as a gift, you cannot deduct expenses. Talk to a tax professional about your specific situation.