Few people know this, but part of the income tax you already have to pay can go to projects that care for children and teenagers. You do not pay more for it. You simply choose where part of your tax goes, instead of leaving it all to the Federal Revenue Service.
In this post, we explain how it works, how much you can direct and how it relates to care homes like PROHACC.
What the law says
Brazil's Child and Adolescent Statute (ECA) allows people and companies to donate to the Funds for the Rights of Children and Adolescents and deduct that amount from their income tax. The limits, under article 260 of the ECA, are:
- Individuals: up to 6% of the tax owed on the annual tax return, combined with the other incentives (such as culture, audiovisual and elderly funds).
- Companies: up to 1% of the tax owed, for companies taxed under the actual profit regime (lucro real).
These funds exist at the national, state and city levels. In the city of São Paulo, the city fund is called FUMCAD, the Municipal Fund for the Rights of Children and Adolescents. The CMDCA, the Municipal Council for the Rights of Children and Adolescents, decides how the money is used.
Two ways to donate as an individual
1. During the year, by December 31. You donate straight to the fund, by bank slip, transfer or Pix. Then you report the amount on the following year's return. In this case, the limit is up to 6% of the tax owed. For São Paulo's FUMCAD, people who donate by transfer or Pix need to email the receipt and their personal details to get the official receipt, as the city government instructs.
2. When you file your return. The Revenue Service's own program has an option called "Doações diretamente na Declaração" (donations directly on the return). You choose "Criança e Adolescente" (children and adolescents), select the state and city, and the program calculates the amount. Here the limit is lower, up to 3% of the tax. Then you pay a DARF tax slip by the filing deadline. This option is for people who file the complete form.
If you are getting a refund, the donation increases it. If you owe tax, it lowers the amount. In practice, the money comes out of the same pocket. Only the destination changes.
Use the Federal Revenue Service simulator, linked on the FUMCAD website, to calculate your limit.
Does the money go to PROHACC?
This is the part that needs to be very clear. A donation through income tax goes to the fund, not directly to an organization.
In São Paulo, FUMCAD lets donors direct the amount to a focus area, an organization or a specific project. To do that, you need to send a formal letter to the CMDCA within 90 days of the donation, naming the project, the organization and the amount. Only organizations with projects approved by the CMDCA and currently fundraising can receive money this way.
That is why PROHACC can only receive Income Tax funds this way if it is registered with the CMDCA and has an approved project open for fundraising in FUMCAD.
Even when the donation does not go to PROHACC, it is still a great choice. The fund's resources finance projects for children and teenagers in the city, chosen by the council. You help São Paulo's children just the same.
What about companies?
Companies taxed under the actual profit regime can direct up to 1% of the tax owed to children's funds. If you work in finance or accounting at a company, it is worth bringing this up with the leadership.
A quick step by step
- Calculate your limit with the Revenue Service simulator.
- Decide whether you will donate by December (up to 6%) or on your return (up to 3%).
- Donate to FUMCAD or to another children's fund of your choice.
- Keep the receipt or the paid DARF.
- If you want to direct the donation, send the letter to the CMDCA within the deadline.
- Report the donation on your tax return.
Before we finish
Income tax is one way to help, but it does not replace direct donations. PROHACC has no agreement with the government. What keeps the home running, month after month, are the Pix transfers, the campaigns and the donations from people like you. If you can, do both.
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Sources
- Child and Adolescent Statute, Law 8.069/1990, arts. 260 and 260-A (updated text on the Chamber of Deputies portal): https://www2.camara.leg.br/legin/fed/lei/1990/lei-8069-13-julho-1990-372211-normaatualizada-pl.html
- São Paulo City Government, Municipal Department of Human Rights and Citizenship. FUMCAD, how to donate: https://prefeitura.sp.gov.br/web/direitos_humanos/w/participacao_social/fundos/fumcad/259766
- São Paulo City Government. CMDCA: https://prefeitura.sp.gov.br/web/criancas_e_adolescentes/cmdca