BKD summarizes the deduction of Haiti contributions in 09

 


George S. Storey
gstorey@bkd.com

A newly passed bill will allow taxpayers who make charitable contributions to Haiti relief programs before March 1, 2010, to claim those contributions on their 2009 income tax returns. Charitable contributions to qualified charities are generally deductible for individuals who itemize deductions on their tax returns. Charitable contributions are normally deductible in the year made or charged to a credit card.

The Senate, however, has unanimously passed legislation that allows taxpayers to deduct cash charitable contributions to aid victims of the devastating earthquake in Haiti. The bill was passed January 21, 2010, a day after the House of Representatives also unanimously approved the bill. The president is expected to sign the bill into law.

The bill applies to individuals who itemize deductions, corporations and other taxpayers. For contributions made through text-messaging services, taxpayers may substantiate their donation with a telephone bill identifying the receiving charity and the date and amount of the gift. Senate Finance Committee Ranking Member Chuck Grassley warns people to “be careful to give only to groups they recognize and trust.” If you or your business make such a contribution by March 1 and want to deduct it on a 2009 tax return, be sure to notify your BKD tax advisor.