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Contributions for Haiti
Email Alert
CapinCrouse LLP
Under a special law recently passed by Congress and signed by the President, a donor who makes a cash contribution for the relief of Haitian earthquake victims after January 11 and before March 1, 2010 can take a tax deduction for the gift for either 2009 or 2010. The law refers to this as an "acceleration" of the contribution deduction, since it may be claimed on the tax return filed for 2009, even though given in 2010.
This email only addresses the Federal contribution deduction. Donors will need to check their own states' for conformity.
"Cash" includes contributions by check, charged to a credit card, or even charged to a cell phone. The Red Cross and other organizations have accepted contributions made via text messages sent to specific telephone numbers, which included the word "Haiti".
The contribution must be for "the relief of victims in areas affected by the earthquake in Haiti on January 12, 2010." We assume that would include reasonable overhead. The specificity may be a response to some of the fund-raising press following Katrina, where organizations raised money which was not spent to help Katrina victims.
In light of the text contributions, the law specifically allows a telephone bill that shows the name of the donee organization, the date and the amount to meet the documentation requirements. More traditional contributions must meet the normal documentation requirements.
Many churches and other organizations are raising money for Haitian relief efforts, but plan to forward the amounts contributed to another organization (e.g., Salvation Army, Red Cross, or Mennonite Central Committee) that actually does the relief work. This special contribution timing option will be available if solicitation communications commit to send the funds for Haitian earth quake relief, and the church actually sends them for that purpose.
Exempt organizations receiving these gifts are not required to do anything special to facilitate the donor's tax deduction, whether the donor wants to claim it in 2009 or 2010.
An organization accepting contributions for Haitian relief, however, may help donors in several ways:
Email Alert
CapinCrouse LLP
Under a special law recently passed by Congress and signed by the President, a donor who makes a cash contribution for the relief of Haitian earthquake victims after January 11 and before March 1, 2010 can take a tax deduction for the gift for either 2009 or 2010. The law refers to this as an "acceleration" of the contribution deduction, since it may be claimed on the tax return filed for 2009, even though given in 2010.
This email only addresses the Federal contribution deduction. Donors will need to check their own states' for conformity.
"Cash" includes contributions by check, charged to a credit card, or even charged to a cell phone. The Red Cross and other organizations have accepted contributions made via text messages sent to specific telephone numbers, which included the word "Haiti".
The contribution must be for "the relief of victims in areas affected by the earthquake in Haiti on January 12, 2010." We assume that would include reasonable overhead. The specificity may be a response to some of the fund-raising press following Katrina, where organizations raised money which was not spent to help Katrina victims.
In light of the text contributions, the law specifically allows a telephone bill that shows the name of the donee organization, the date and the amount to meet the documentation requirements. More traditional contributions must meet the normal documentation requirements.
Many churches and other organizations are raising money for Haitian relief efforts, but plan to forward the amounts contributed to another organization (e.g., Salvation Army, Red Cross, or Mennonite Central Committee) that actually does the relief work. This special contribution timing option will be available if solicitation communications commit to send the funds for Haitian earth quake relief, and the church actually sends them for that purpose.
Exempt organizations receiving these gifts are not required to do anything special to facilitate the donor's tax deduction, whether the donor wants to claim it in 2009 or 2010.
An organization accepting contributions for Haitian relief, however, may help donors in several ways:
- An organization's receipt for a gift should show that it is for victims of the earthquake in Haiti, along with the date received and amount.
- Similarly to year-end gifts, a mailed check that is post-marked before March 1 would qualify, and receipting similar to that used for year-end gifts would help the donor.
- Organizations that only issue quarterly or less often receipts should issue a receipt in March for January and February, so a donor could have a receipt for a contribution being claimed for 2009 when they file their tax return. A proposed IRS regulation requires all donors have a bank or written record of any cash gift by the time they file their tax return.
- When organizations issue contribution statements for 2010, they should include a note alerting donors that the statement includes contributions for Haitian earthquake relief that the donor may have taken as a tax deduction on their 2009 taxes.
Information generally about assisting with disaster relief may be found on the IRS website HERE.
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