Raffle tickets are not tax deductible as a charitable contribution, even when every dollar goes to a registered 501(c)(3). The IRS treats the ticket price as payment for a chance to win a prize, not a gift, so no portion qualifies for the charitable deduction. Losing tickets can sometimes be deducted as gambling losses, and any prize you win is taxable income.
Why the IRS Denies the Deduction
The rule traces to Revenue Ruling 67-246, which looked at a taxpayer who paid $5 for a charity raffle ticket with a car as the prize. The IRS concluded that “no part of the payment is deductible as a charitable contribution” because amounts paid for chances in raffles, lotteries, or similar drawings are not gifts.1Internal Revenue Service. Revenue Ruling 67-246 Publication 526 puts it just as plainly: “You can’t deduct as a charitable contribution amounts you pay to buy raffle or lottery tickets.”2Internal Revenue Service. Publication 526, Charitable Contributions
What the charity calls the payment does not change the answer. Whether the ticket is labeled a “donation,” a “suggested contribution,” or a purchase, the IRS looks at what you received in return. You got a chance to win something valuable, and that chance disqualifies the payment from being a gift.
The logic sits inside Section 170 of the Internal Revenue Code, which allows a charitable deduction only to the extent a payment exceeds the fair market value of what you receive back.3Office of the Law Revision Counsel. 26 USC 170 – Charitable Contributions and Gifts The IRS treats the value of a raffle chance as equal to the ticket price, so nothing is left over to deduct.
How to Support the Charity and Still Deduct
If the deduction matters more to you than the chance to win, make a direct donation and decline the ticket. Revenue Ruling 67-246 acknowledges that a payment made without accepting any ticket or privilege in return can qualify as a deductible gift.1Internal Revenue Service. Revenue Ruling 67-246 You give up the prize, but you keep the deduction.
Benefit Dinners and Auctions Are Different
Raffle tickets get harsher treatment than some other charity-event purchases, which is where confusion often starts. When you pay a charity and receive something in return, only the amount above the fair market value of what you got is deductible. A $500-per-plate benefit dinner where the meal is worth $150 produces a $350 charitable contribution. For any such quid pro quo payment over $75, the charity is required to give you a written estimate of what you received and tell you the deductible portion.4Internal Revenue Service. Substantiating Charitable Contributions
Raffle tickets fail that math by design. Because the IRS values the chance to win at the full ticket price, there is never an excess left to deduct. A $100 benefit dinner ticket for a $40 meal gives you a $60 deduction. A $100 raffle ticket gives you nothing.1Internal Revenue Service. Revenue Ruling 67-246
Losing Tickets as Gambling Losses
Non-winning raffle tickets are not a complete loss, but the path to deducting them is narrow. The cost qualifies as a gambling loss, deductible only if two things are true: you itemize on Schedule A, and your total gambling losses for the year do not exceed your total gambling winnings.5Internal Revenue Service. Topic No. 419, Gambling Income and Losses
The 2026 standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly.6Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Unless your total itemized deductions clear those figures, itemizing just to claim raffle losses costs more than it saves. Most taxpayers take the standard deduction, which puts this deduction out of reach in practice.
For those who do itemize, the losses go on Schedule A as “Other Itemized Deductions,” and they can only offset gambling income. If you had $5,000 in raffle winnings and spent $800 on losing tickets across the year, that $800 is deductible. With no gambling winnings, the same $800 gets you nothing.5Internal Revenue Service. Topic No. 419, Gambling Income and Losses
Records matter. Keep the tickets themselves or photos of them, with the date, the sponsoring organization, and the amount paid. A running log across the year works if you buy into multiple raffles.5Internal Revenue Service. Topic No. 419, Gambling Income and Losses Without documentation, the IRS can disallow the deduction, leaving you taxed on the full winnings with no offset.
If You Win, the Prize Is Taxable
The fair market value of any raffle prize is taxable income for the year you win it, whether the prize is cash, a car, a vacation, or electronics.7Internal Revenue Service. Publication 525, Taxable and Nontaxable Income Report it on Schedule 1 (Form 1040), line 8b, even if you never receive a Form W-2G from the organizer.5Internal Revenue Service. Topic No. 419, Gambling Income and Losses
The raffle organizer has its own reporting and withholding thresholds. A Form W-2G must be filed when your winnings meet or exceed $2,000 (the inflation-adjusted amount for 2026) and are at least 300 times the ticket price. The organizer must also withhold 24% of your net winnings, meaning prize value minus ticket cost, when that net exceeds $5,000.8Internal Revenue Service. Instructions for Forms W-2G and 5754
A prize that is not cash creates a cash problem. The organizer still has to withhold when the net value exceeds $5,000, but there is no payout to withhold from. Either you write the organizer a check for 24% of the net prize value when you claim it, or the organizer pays the tax for you, in which case the effective rate rises to 31.58% because the tax paid on your behalf is itself taxable income.8Internal Revenue Service. Instructions for Forms W-2G and 5754 Winning a $30,000 car on a $20 ticket means arriving prepared to hand over roughly $7,200 on the spot. Some winners of large non-cash prizes decline them for exactly this reason.
Donating the Prize Back
Giving the prize back to the charity does not erase the tax bill. You still report the fair market value as income for the year you won.7Internal Revenue Service. Publication 525, Taxable and Nontaxable Income Returning the prize creates a separate charitable contribution you can deduct if you itemize, at the item’s fair market value on the date you donate it. On paper the deduction could offset the income. In practice it rarely lands at zero, because the winnings can push you into a higher bracket and charitable deductions are capped by adjusted gross income limits. Run the numbers with a tax professional before making that call on a valuable prize.