A Compliance-Friendly Approach to Donating Retired Tech

• Blog Post

Retired IT assets don’t have to become a cost burden. In fact, when handled correctly, donating end-of-life technology can reduce environmental impact, support nonprofits, and generate meaningful tax benefits. However, donation introduces serious risks if data security, compliance, and documentation are overlooked. This article explains why all IT donations should flow through a qualified IT asset disposition (ITAD) managed service provider to ensure NIST-compliant data destruction, chain-of-custody tracking, and audit-ready records. It also outlines how fair market value is determined and what the IRS requires for compliance.

• IT donations can unlock significant tax deductions, but only with proper valuation, IRS forms, and documentation.
• NIST 800.88 data wiping and ITAD-managed chain of custody protect donors from breach and liability.
• Working with a qualified ITAD partner maximizes asset value, reduces nonprofit risk, and supports compliance and sustainability goals.

Turning Retired IT Assets into Tax Savings: A Compliance-Friendly Approach to Donation

Every business has them—retired laptops, monitors, and other IT assets waiting for someone to figure out what to do with them. While many companies put them in storage closets or scrap them (both costly mistakes!), or send them to processors for reuse and recycling, there’s another route that’s often overlooked: donation.

When managed correctly, donating used IT equipment can reduce your environmental footprint, help bridge the digital divide, and unlock significant tax advantages. But—and it’s a big but—it must be done through a secure and compliant IT asset disposition (ITAD) process and must be properly documented to claim it on your taxes.

In this article, we’ll explore how organizations can turn end-of-life tech into a win-win scenario: one that’s good for business, good for the environment, and good for the community.

Why Donation Deserves a Closer Look

Donating assets is sometimes thought of as an easy way to dispose of unwanted IT assets, but that isn’t the right approach, as it introduces risks for companies donating them and the non-profits receiving them. Check out our article on the Steps to Successful Donation for more information on that and why recovering cash value via an ITAD Managed Service Provider (ITAD MSP) and then donating cash is often the best choice.

Still, there are some instances where donating assets directly (sort of) can be beneficial, like donating them to a non-profit that you know will make good use of those specific assets. In that case, donating assets can be a great way to dispose of unwanted assets, but it still must be done through a secure and compliant ITAD MSP to reduce the risks to your company.

Benefits of Donating Retired Tech

Here’s why IT donations should be on your radar:

Tax Deductions – Companies can deduct the fair market value (FMV) of donated IT equipment on their corporate taxes.
Sustainability – Reuse dramatically reduces carbon emissions up to 28 times more compared to recycling or landfilling.
Brand Reputation – Donating to vetted nonprofit partners demonstrates corporate responsibility and strengthens community relations.
Social Impact – Donating working assets can help bridge the digital divide, putting assets in the hands of those who could not otherwise afford them. This benefits communities and boosts your corporate social responsibility (CSR) portfolio.

Donation Risks and Why Data Security Is Non-Negotiable

Donating IT equipment directly means you could be at risk of a costly data breach. This is why all hardware must be wiped to NIST 800.88 standards. Most companies lack the expertise to perform secure data destruction, and utilizing an ITAD MSP is critical to ensure:

Certified data destruction with serialized audit reports.
Chain-of-custody tracking to monitor each asset through its final destination.
Documentation to verify every step of the process (which may also help with your tax deductions).

There are also risks to the non-profits of accepting donated IT assets. If they are not working or lack the IT personnel to get them integrated into their organization, it could cost them time and money they don’t have. The assets may end up disposed of or collecting dust on a shelf.

If the non-profit cannot use them, or even if they do, they may dump them illegally or use an unqualified recycler. If your original information was not wiped from those assets and they are discovered causing environmental contamination, your company, not the non-profit, could be held liable for the damage they cause. Yet another reason why data security is non-negotiable.

The Tax Angle: How Donations Can Save You Money

When your company donates technology assets to a qualified 501(c)(3) nonprofit organization, you may be eligible for a tax deduction. While there are different ways to evaluate how much the donated assets are worth, the most common approach, and the one most accepted by the IRS, is the item’s Fair Market Value (FMV), or what it would sell for in its current condition.

You could simply have your usable retired assets refurbished and resold through proper ITAD channels, generating cash for your IT budget. However, donations allow for tax deductions, enhance your CSR portfolio, and boost your brand reputation.

What Does Fair Market Value Look Like?

To claim charitable tax deductions from donated assets, you should claim fair market value (FMV), which is what the equipment would reasonably sell for on the open market in its current condition. You can look up the value of those specific assets on well-known sites like Amazon Renewed. For example:

A 2-year-old corporate laptop in good condition may have a resale value of $250–$400.
A mid-range monitor could retain $50–$100 in value.
A mobile phone with intact functionality might still be worth $100+.

Multiply that across dozens, hundreds, or thousands of assets, and the deduction can be significant.

Compliance: What the IRS Needs to See

To be compliant with the IRS, donations of IT assets must be handled correctly with all the paperwork in order, or you risk the donation being disallowed and reduced to $0, or worse, it could trigger an IRS audit.

Here is an overview of what the IRS will expect.

IRS Form 8283 (Section A) – Required for all donations over $250. You need to fill in the amount of the donation, but you won’t have to attach additional paperwork. However, you are required to keep a copy of your donation letter (see below), and should also keep copies of how you determined the FMV of the assets, any purchase receipts, repair records, and any paperwork from your ITAD MSP, as this helps justify the value if the IRS asks you to verify it.

IRS Form 8283 (Section B) – If the total value exceeds $5,000, then you must also fill out Section B. For this amount, you must have a qualified appraisal conducted, which must be retained in your records. In this case, you use the value determined by your appraiser rather than using FMV. For this level of donation, you also need a signature from the non-profit recipient in section B.

Fair Market Value Assessment – For donations less than $5000, you need to determine the FMV yourself. Use objective resale marketplaces like Amazon Renewed to back your claims. It’s recommended that you keep copies of this information in case of an IRS audit. Note that refurbished assets with a new OS will be worth more than those that are simply used. This is where documentation from your ITAD MSP should also be kept to help legitimize your case for the FMV you claim.

Qualified Appraisal - For donations that exceed $5000, you must have the assets’ value determined by a qualified appraiser. To assist the appraiser, you can supply company records of the purchase cost and money spent on those assets, as well as documentation from your ITAD provider to show the assets were wiped of data, refurbished, with a new OS installed. You must keep the letter from the appraiser in your records.

Donation Acknowledgment Letter – A letter acknowledging the donation is required for all donations exceeding $250. This comes from the non-profit that receives the donation, specifying asset types and quantities they receive. Note that they do not assign any values themselves (that is your responsibility), and they must state if there were any goods or services exchanged. Again, this is not submitted with your form but must be kept in your records in case the IRS requests to see it.

How to Make It Work: The Right ITAD Partner Matters

Donation can’t be an afterthought—it needs to be part of your structured ITAD strategy. Always have your assets processed through a reliable ITAD managed service provider (ITAD MSP), since this will help:

Ensure secure chain of custody
Ensure secure data destruction
Simplify logistics
Refurbish assets so they are in good working condition, reducing risks for the non-profit, and ensuring they hold more value (for the non-profit and for tax deductions)
Provide documentation for tax form and audit trail support

What to Avoid: Common Pitfalls in IT Donation

Not all donation efforts are created equal. Watch out for:

Dumping Equipment – Giving away broken, non-functional, or outdated gear creates e-waste headaches and financial risks for nonprofits, presents environmental and legal risks for the donor, and could disqualify tax deductions.

Insecure Data Practices – If you donate equipment directly, never assume the recipient will wipe data. This is something your ITAD MSP can take care of for you.

Lack of Documentation – Whether donating cash or equipment, without a clear paper trail, you’re vulnerable in the event of an IRS audit. Ensure you keep all your records.

Unvetted Recipients – Only donate to registered 501(c)(3) organizations; otherwise, your donation will be disallowed.

Final Thoughts: Make Donation a Strategic Win

Donating retired IT assets is a strategic move that aligns with modern business goals, including financial efficiency, sustainability, and social impact. Done wrong, it’s a significant risk, but done right, it’s an excellent opportunity.

By working with an experienced ITAD provider like ICT, your organization can maximize the value of end-of-life IT assets, qualify for tax deductions when you donate them, reduce carbon emissions, meet CSR and sustainability targets, and empower nonprofits and communities by helping bridge the digital divide.

For more information, check out our white paper on ITAD Donations & Fair Market Value and our other white paper on the Steps to Successful IT Asset Donations. If you are looking for ITAD solutions or have any questions about ITAD or donating IT assets, please contact us at ICT.

Selected References:

IRS. (2011). Charitable Contribution Deductions | Internal Revenue Service. Irs.gov. https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contribution-deductions

‌IRS Pub 561 (2020). Publication 561, Determining the Value of Donated Property | Internal Revenue Service. Www.irs.gov. https://www.irs.gov/publications/p561

IRS Form 8283. (2020). Instructions for Form 8283 (12/2020) | Internal Revenue Service. Www.irs.gov. https://www.irs.gov/instructions/i8283

‌IRS Topic No. 506 (2.d.) Topic 506 Charitable Contributions | Internal Revenue Service. (n.d.). Www.irs.gov. https://www.irs.gov/taxtopics/tc506

‌Law Help. (2-024). Welcome to LawHelp.org/DC | A guide to free and low-cost legal aid and services in Washington, D.C. (2024). Lawhelp.org. https://www.lawhelp.org/dc/resource/reporting-requirements-for-non-cash-charitabl

Sheppard, H. (2022). Reprinted from Tax Notes Federal. 175(7), 1061. https://www.chamberlainlaw.com/assets/htmldocuments/FMV%20HBU%20and%20CEs%20article.pdf

Tax Exempt Organization Search Tool (n.d.). Search for Tax Exempt Organizations | Internal Revenue Service. (n.d.). Www.irs.gov. https://www.irs.gov/charities-non-profits/search-for-tax-exempt-organizations

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