New Law Allows a 2009 Deduction for 2010 Charitable Contributions for Haiti Disaster Relief

On January 22, 2010, President Obama signed into law HR 4462 accelerating the deduction for certain charitable contributions made in cash to benefit the victims affected by the earthquake in Haiti on January 12, 2010. For charitable contributions made after January 11, 2010, and before March 1, 2010, that are otherwise deductible under Section 170 of the Tax Code, taxpayers may treat these contributions as if the contributions were made on December 31, 2009, and not in 2010.

This is a late Christmas gift from Congress and the White House to encourage immediate charitable giving to the Haiti disaster relief. The vote in the House and Senate to pass HR 4662 was unanimous. It is worth repeating that February 28, 2010 is the last day to make contributions deductable in 2009. It is not yet known whether states, such as California, will conform to the federal law change.

Notable is that this deduction does not apply to non-cash contributions such as medicine, food or clothing. Moreover, only contributions to U.S. organizations qualify (not donations to foreign organizations). Finally, substantiation is required for all charitable contributions. In the case of donations for Haiti disaster relief, HR 4462 allows a telephone bill showing the name of the donee organization, the date of the contribution, and the amount of the contribution to satisfy the record keeping requirement of Section 170(f)(17) of the tax code.

This article is republished with the permission of Mark Muntean.  Further duplication without the permission of Mark Muntean is prohibited. All rights reserved.