Are charitable donations penalized?

Are charitable donations penalized?

Short answer: Usually, yes. Gifts to charities, including churches, are generally treated like any other gift during the look-back period.

Figures change periodically. Double-check current amounts before relying on them.

Federal Medicaid law does not make an exception for charitable gifts. A donation to a church, charity or other organization during the look-back period (60 months in most states) is generally treated as a transfer for less than fair market value, and can cause a penalty.

States sometimes accept that a transfer was made “exclusively for a purpose other than qualifying for Medicaid.” A long, documented history of regular giving, such as years of tithing at the same level, made when the person was healthy, may support that argument in some states. The standard is strict, and states differ.

Some states also disregard small gifts below a set amount per month or year. Others do not.

Practical steps:

  • Report donations on the application; do not leave them off.
  • Gather records of past giving if you want to show a long-standing pattern.
  • Stop or reduce large donations if long-term care may be needed within five years.

Getting help

Every situation is different, and small facts can change the answer. If this question affects a real decision, especially with a spouse at home, a home, gifts or a trust, a Certified Medicaid Planner can apply your state’s rules to your situation. As a rough guide, published fees for help with an application range from about $500 to $6,000, and hourly help from about $150 to $600.

Last updated for 2026. General information only, not legal or financial advice. Medicaid Answers is a free educational resource published by Medicaid Answers Foundation.

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