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Haiti Relief Donations Qualify for 2009 Tax Relief

Haiti Relief Donations Qualify for 2009 Tax Relief

On January 22, 2010 President Obama signed into law H.R. 4462, which allows taxpayers to claim a charitable contribution deduction in tax year 2009 for donations made after January 11, 2010 and before March 1, 2010, for the relief of victims in areas affected by the January 12, 2010 earthquake in Haiti. This is only available if the contribution is made in cash (not goods). This includes contributions made by text message, check, credit card or debit card.

Contributions to foreign organizations are generally not deductible, nor are payments to specific individuals or families. To ensure deductibility, contributions should be to domestic charities and if the contribution is over $250, a receipt from the organization must be obtained. Most organizations that are eligible to receive tax-deductible donations are listed in a searchable online database available on IRS.gov under "Search for Charities."

To receive the tax benefit, taxpayers must itemize their deductions on Schedule A. Those who claim the standard deduction, including all short-form filers, are not eligible. Taxpayers have the option of deducting these contributions on either their 2009 or 2010 returns (not both); whichever produces the greater tax savings.

Note that, for donations by text message, a telephone bill will meet the recordkeeping requirement if it shows the name of the donee organization, the date of the contribution and the amount of the contribution. Since the earthquake, donors have contributed more than $220 million to major U.S. relief groups, with $22 million through cell phone text messages.
Caution: While taxpayers in States that mirror Federal tax law should expect the same tax treatment for Haiti relief contributions. Taxpayers are advised to verify that this State tax treatment in fact applies. We do not know yet if Minnesota will conform with this.

This year’s special Haiti relief provision is modeled upon a 2005 law that, in the wake of the December 24, 2004, Indian Ocean Tsunami, allowed taxpayers to deduct donations they made during January 2005 as if they were donations made in 2004.

Source: “Haiti Relief Donations Qualify for Immediate Tax Relief.” www.irs.gov. 25 Jan. 2010.