Money you receive through GoFundMe is usually not taxable, but it can be. Whether GoFundMe money is taxable depends on why people sent it: contributions to a personal cause like medical bills, funeral costs, or disaster recovery are treated as nontaxable gifts, while money raised in exchange for a product, reward, or equity stake is taxable income you have to report to the IRS.
When GoFundMe Money Is a Nontaxable Gift
Federal tax law excludes gifts from gross income.1Office of the Law Revision Counsel. 26 USC 102 – Gifts and Inheritances Whether crowdfunding contributions qualify as gifts turns on a test the Supreme Court set out in Commissioner v. Duberstein: the money must come from “detached and disinterested generosity,” meaning the contributor gave out of affection, respect, or charity and expected nothing in return.2Justia Law. Commissioner v. Duberstein, 363 US 278 (1960) A campaign for someone’s surgery, a family’s funeral expenses, or a neighbor’s home after a fire almost always meets that standard. Backers aren’t buying anything. They’re helping.
The IRS has confirmed this in its own guidance, stating that distributions from a crowdfunding campaign are nontaxable gifts when contributions result from the contributors’ detached and disinterested generosity and those contributors do not receive or expect to receive anything in return.3Internal Revenue Service. IRS Reminds Taxpayers of Important Tax Guidelines Involving Contributions and Distributions From Online Crowdfunding If a campaign raises $30,000 for cancer treatment, you don’t owe federal income tax on it, and there’s no dollar cap on that treatment. The key facts are that contributors gave freely and nothing of value passed back to them.
When GoFundMe Money Is Taxable
The picture changes when backers get something for their money. Kickstarter-style campaigns that promise a finished product, early access to software, or any tangible reward are sales, and the IRS treats the total amount raised as gross income.4Office of the Law Revision Counsel. 26 USC 61 – Gross Income Defined It doesn’t matter that you haven’t manufactured or shipped anything yet. The money is income in the year you can access it.
Because reward-based crowdfunding is business income, it comes with the full weight of business taxation. You’ll owe self-employment tax of 15.3% on net earnings, covering the Social Security and Medicare contributions an employer would normally split with you.5Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) The offset is that you can deduct legitimate business expenses: manufacturing, platform fees, shipping, packaging, and advertising all reduce the taxable amount. Report the income and expenses on Schedule C.
Equity crowdfunding, where backers get a stake in your company, sits in a different framework. Selling equity isn’t necessarily income the same way a product pre-sale is; the tax treatment depends on how the offering is structured. If you’re raising capital that way, work with a tax professional who knows securities law.
Who Owes the Tax When Someone Else Ran the Campaign
Many personal GoFundMe pages are set up by one person on behalf of another. A friend launches the campaign, the platform deposits the funds in the friend’s account, and the friend then hands the money to the person it was raised for. The IRS has addressed this directly: if the organizer collects the funds and distributes them to the person the campaign was organized for, the money is generally not included in the organizer’s gross income.6Internal Revenue Service. Money Received Through Crowdfunding May Be Taxable; Taxpayers Should Understand Their Obligations and the Benefits of Good Recordkeeping
That pass-through treatment only works if the organizer actually forwards the funds. Any portion the organizer keeps as compensation for running the campaign is taxable income to the organizer. Document everything: the total received, the amount transferred to the beneficiary, and the dates. The 1099-K goes to whoever actually receives the platform distribution, so an organizer can end up holding a tax form for money that isn’t theirs.6Internal Revenue Service. Money Received Through Crowdfunding May Be Taxable; Taxpayers Should Understand Their Obligations and the Benefits of Good Recordkeeping
What Form 1099-K Means for Your Campaign
GoFundMe and similar platforms report payments to both you and the IRS on Form 1099-K, which shows the gross amount processed during the calendar year. Copies must be sent to you by January 31.7Internal Revenue Service. Understanding Your Form 1099-K
The reporting threshold has moved around in recent years. The American Rescue Plan Act of 2021 dropped it to $600, but the IRS repeatedly delayed that change and Congress has since reinstated the original numbers. Platforms are not required to file a 1099-K unless your total payments exceed $20,000 and you have more than 200 transactions in a calendar year.8Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill; Dollar Limit Reverts to $20,000 Both conditions have to be met. A campaign that raises $50,000 in a single lump donation wouldn’t trigger a mandatory 1099-K under this rule. Some platforms still send the form at lower amounts voluntarily.
Getting a 1099-K doesn’t mean the money is taxable. It means the IRS knows you received it. If the funds are genuine gifts, you still have to account for the form on your return so the IRS doesn’t flag a mismatch. The gross number on the form is the pre-fee total, not what you actually netted after the platform’s cut.
How to Put Crowdfunding on Your Tax Return
Business Income
For a reward-based or pre-sale campaign, report the total raised as gross receipts on Schedule C, then deduct your allowable business expenses. The net profit flows to your Form 1040 and gets hit with self-employment tax, which you calculate on Schedule SE.
Gifts With a 1099-K Attached
This is where most personal-campaign organizers get tripped up. If you raised money for an emergency and the platform sent you a 1099-K, the IRS has that number on file. Ignoring it invites an automated notice. The IRS instructs you to report the 1099-K amount at the top of Schedule 1 (Form 1040) and then back it out with an adjustment so you don’t pay tax you don’t owe.9Internal Revenue Service. What to Do With Form 1099-K You’re telling the IRS you received the money and explaining why it isn’t taxable income. Keep the campaign page, donor messages, and records of how the funds were spent in case the agency asks.
Estimated Payments for Large Business Campaigns
A successful reward campaign can create a tax bill big enough to trip the estimated-tax rules. The IRS generally requires quarterly estimated payments if you expect to owe $1,000 or more when you file. Raise $80,000 on Kickstarter while working a W-2 job, and your paycheck withholding won’t come close to covering the added income tax and self-employment tax. You can generally sidestep the underpayment penalty by paying at least 90% of the current year’s tax or 100% of the prior year’s, whichever is smaller.10Internal Revenue Service. Estimated Taxes A safe habit is to set aside roughly 25 to 30% of net proceeds for taxes as soon as the money comes in and send an estimated payment in the same quarter.
What Donors Need to Know
Contributing to someone’s personal GoFundMe does not give you a tax deduction, no matter how sympathetic the cause. The IRS only allows charitable deductions for contributions to qualified organizations such as 501(c)(3) nonprofits.11Internal Revenue Service. Publication 526 – Charitable Contributions Sending $500 to help a neighbor cover surgery is a generous personal gift, but it’s made with after-tax dollars and carries no tax benefit. Some campaigns route funds directly to a registered nonprofit, and those may qualify; look for a verification badge or nonprofit designation on the page.
Donors giving large amounts should know about the federal gift tax exclusion, which is $19,000 per recipient for 2026.12Internal Revenue Service. Frequently Asked Questions on Gift Taxes Give one person more than that in a calendar year and you have to file Form 709.13Internal Revenue Service. Instructions for Form 709 (2025) Filing doesn’t mean owing gift tax; the excess just counts against your lifetime exemption, which is large enough that most people never actually pay. In practice, most crowdfunding contributions are well under $19,000 per donor.
Records to Keep
The IRS expects organizers and recipients to keep complete records of the fundraising and how the money was spent, and to hold them for at least three years.3Internal Revenue Service. IRS Reminds Taxpayers of Important Tax Guidelines Involving Contributions and Distributions From Online Crowdfunding
For a personal campaign, save the campaign page or screenshots, medical bills or invoices that match the stated purpose, bank statements showing disbursement, and records of any transfers to a beneficiary if you were the organizer. For a business campaign, keep the same records any business would: expense receipts, fulfillment records, platform fee statements, and clean bookkeeping tying pre-sale revenue to costs.
What Happens If You Don’t Report
Skipping taxable crowdfunding income exposes you to the same penalties as skipping any other income. The IRS can charge a failure-to-pay penalty of 0.5% of the unpaid taxes for each month or partial month the balance sits outstanding, plus interest that compounds daily.14Internal Revenue Service. Failure to Pay Penalty A separate failure-to-file penalty applies at a steeper rate if you miss the filing deadline.
The more common trouble isn’t evasion. It’s confusion. Someone raises money for a personal emergency, receives a 1099-K, panics, and either reports the full amount as income or ignores the form entirely. Neither response is right. If the funds are gifts, put them on Schedule 1 with an offsetting adjustment. If they’re business income, report them on Schedule C. Getting the classification right on the front end is far cheaper than fixing it with the IRS later.