Update: Reader Laksh notes that American Airlines has a similar offer to get 10 miles per dollar donated to American Red Cross. (Direct Link)
The Offer
- Southwest teamed up with three disaster relief charities to offer 10 Southwest Rapid Rewards points per dollar donated. The following charities are eligible: American Red Cross, Team Rubicon, and Feeding America.
The Fine Print
- Minimum $25 donation required to be eligible for points offer.
- Valid through May 31, 2020.
- Points will be reflected in your Rapid Rewards account 30 to 45 days after a donation has been made.
- You must provide your Rapid Rewards account information in order to qualify.
- Maximum earn limit of 10,000 points.
Our Verdict
Always nice to see incentives for charity donations, especially in trying times. Remember that you now get $300/year in charity donations as a tax deduction even if you don’t itemize (possibly $600 for a couple filing jointly).
The Red Cross landing page seems to indicate the donation will be fully tax deductible. That’s somewhat surprising. It’s possible that the points are a gift from Southwest and not from the charity, and thus the donation is fully tax deductible. Please consult your tax advisor to determine this. I’d guess that they will be sending out a tax receipt for the full amount; let us know in the comments if you make a donation.
There’s no terms indicating these points are excluded from the Companion Pass requirement, so I’d assume they will count toward the Companion Pass.
Hat tip to manageroftheyear
Just noting that their blog post on the topic includes the following fine print: “Rapid Rewards bonus points do not count toward A-List, A-List Preferred, or Companion Pass qualification.”
When making a donation through this portal for Feeding America, the receipt (for the full amount donated) reads, “No goods or services were exchanged for this contribution. All gifts may be tax-deductible to the extent allowed by law.”
Maybe use Citi card with 10x bonus right now
Good idea, hopefully that’ll work
American Airlines has the same offer for American Red Cross. 10miles/$
Awesome that Southwest is doing this. Anyone know what cards might categorize any of these as bonus categories? BofA Cash Rewards online shopping through PayPal maybe?
Remember the extra $300 tax credit beyond normal giving for 2020, too.
While $300 for 3K WN miles is not considered “wise”, the tax credit and using a miles/CB card makes it worth it, especially, if one hasn’t chosen a donation for charity/service since CV began.
Just to be clear because your language is a little misleading, the provision in the CARES Act doesn’t turn charitable donations into tax credits. It simply allows those claiming the standard deduction to also claim up to $300 in charitable donations as a deduction. Normally, only people itemizing their deductions can get any tax benefit from a charitable donation, and for those people, nothing has changed. In tax speak, a deduction reduces the amount of income you have to pay taxes on, and a credit reduces the amount you owe on a dollar for dollar basis.