Do Plasma Donations Report to the IRS?

Yes, income earned from plasma donations is fully taxable and must be reported to the IRS. When you receive payments for plasma donations, these earnings are generally considered taxable income, not a tax-exempt gift or medical reimbursement.

Understanding Plasma Donation Income

For tax purposes, the money received from plasma donations is treated as compensation for your time and the contribution of your bodily fluid, making it a form of income. This is distinct from situations like receiving compensation for pain and suffering or medical expense reimbursement, which typically are not taxable.

Why Plasma Payments Are Taxable

Payments for plasma donations are considered taxable income because they are compensation for a service or product (your plasma). The IRS generally taxes all income derived from labor or capital unless specifically exempted by law. Since plasma donation payments do not fall under any common tax exemptions, they are subject to taxation.

Reporting Requirements for Plasma Donors

While all income is technically taxable, plasma donation centers often issue a tax form to donors who meet certain payment thresholds.

• Form 1099-NEC (Nonemployee Compensation): If a plasma donation center pays you \$600 or more in a calendar year, they are typically required to send you Form 1099-NEC. This form reports the total amount of nonemployee compensation paid to you.
• Your Responsibility: Regardless of whether you receive a 1099-NEC, you are still responsible for reporting all taxable income to the IRS. This means if you earn less than \$600 from a single center but still have total taxable income, you must include it in your tax filings.

How to Report Plasma Donation Income

When filing your annual tax return, income from plasma donations is typically reported on your Form 1040. The specific schedule used can depend on the nature and regularity of your donations:

• Schedule C (Profit or Loss from Business): If your plasma donations are frequent and you treat it like a regular activity to generate income, you might report it as self-employment income on Schedule C. This allows you to deduct related expenses, although there are usually few deductible expenses associated with plasma donation.
• Schedule 1 (Additional Income and Adjustments to Income): For less frequent or irregular donations, the income might be reported on Schedule 1 as "Other Income."

It is crucial to keep accurate records of all payments received from plasma donation centers throughout the year.

Potential IRS Scrutiny

Failing to report taxable income, including earnings from plasma donations, can lead to penalties, interest charges, and even an audit from the IRS. The IRS has access to information reported by companies (like plasma centers) through forms like the 1099-NEC. A mismatch between what a company reports paying you and what you report as income can trigger a review.

Key Takeaways for Plasma Donors

• All Income is Taxable: Treat all payments from plasma donations as taxable income.
• Keep Records: Maintain a detailed record of all payments received, regardless of the amount.
• Understand Form 1099-NEC: If you receive \$600 or more from a single center, expect a 1099-NEC.
• Consult a Professional: If you have questions about reporting your specific income from plasma donations, consider consulting a tax professional or referring to official IRS guidelines.

To ensure compliance and avoid issues, always prioritize accurate and complete income reporting on your tax return.