The Internal Revenue Service listed the guidelines for the tax deductions that taxpayers can take for the contributions they make toward Haiti earthquake relief this year.

Last week, Congress passed, and President Obama signed, legislation that would allow taxpayers to deduct their contributions toward Haiti relief on their 2009 tax returns instead of waiting until next year (see Senate Unanimously Approves Bill to Speed Haiti Tax Deductions). The IRS noted that only cash contributions made to charities that provide Haiti earthquake relief after Jan. 11, 2010, and before March 1, 2010, are eligible for the deductions. This includes contributions made by text message, check, credit card or debit card.

Federal law requires that taxpayers keep a record of any deductible donations they make. For donations by text message, a telephone bill will meet the recordkeeping requirement if it shows the name of the charitable organization, the date of the contribution and the amount of the contribution. For cash contributions made by other means, taxpayers should keep a bank record, such as a canceled check, or a receipt from the charity showing the name of the charity and the date and amount of the contribution.

The new law only applies to cash (as opposed to property) contributions. The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti. Taxpayers have the option of deducting the contributions on either their 2009 or 2010 returns, but not both.

“Americans have opened their hearts to help those affected by the Haiti earthquake,” said IRS Commissioner Doug Shulman in a statement. “This new law provides an immediate tax benefit for the many taxpayers who have made generous donations.”

To get a tax benefit, taxpayers must itemize their deductions on Schedule A. Those who claim the standard deduction, including all short-form filers, are not eligible.

In order to be deductible, contributions must be made to qualified charities and can not be designated for the benefit of specific individuals or families. Most organizations eligible to receive tax-deductible donations are listed in a searchable online database available on IRS.gov under Search for Charities.

Some organizations, such as churches or governments, may be qualified even though they are not listed on IRS.gov. Contributions made to foreign organizations generally are not deductible. Donors can learn more about organizations helping Haitian earthquake victims from agencies such as the U.S. Agency for International Development.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access