2010 Contributions to Haitian Relief Efforts can be
Deducted on 2009 Returns
In the wake of the tragic Earthquake in Haiti, U.S. lawmakers fast-tracked legislation to provide more immediate tax incentives for donating to the Haitian relief effort. On January 22, 2010, President Obama signed legislation that allows donors to the relief efforts in Haiti to deduct some 2010 donations on their 2009 tax return. There are specific requirements relating to the special deduction:
Is available only to individuals (not businesses),
Must be a “Cash charitable contribution” made between 1/11/2010 and 3/1/2010,
Must be specifically earmarked to benefit Haiti earthquake victims.
You have the option of deducting the donations on either your 2009 or 2010 return (but not both). Additionally, you must make the donation qualified charities, and not given to specific individuals or families. To look for qualified charities, search Publication 78. Remember that contributions to foreign agencies are generally not deductible. A list of charities that are currently accepting monies earmarked for relief efforts in Haiti can be found at InterAction.org.
The law also relaxes the record-keeping requirements for some contributions for Haiti relief efforts. For individuals who contribute by cell phone, a telephone bill showing the name of the charitable organization, amount of donation, and date of donation will provide substantiation of the deduction (in case of an audit). Cash charitable donations generally require written confirmation by the tax-exempt organization, but those rules are being suspended for the large number of donors who made donations via text messages. Cash donations made by other means still require a bank record (such as a cancelled check) or receipt from the charity.
Wisconsin residents should note that the state of Wisconsin will not allow donations made in 2010 to be deducted on 2009 Wisconsin returns. Wisconsin taxpayers who claim 2010 deductions to Haitian relief on their 2009 federal returns must subtract the deduction for Wisconsin purposes in 2009, though they may include the deduction for 2010.
For more details, view the IRS press release and the Wisconsin notice regarding donations to Haitian relief. As always, please contact us if you need additional information about this and any other tax matter.
