On January 25, 2010, the IRS announced a new tax law provision that allows people who donate to charities providing earthquake relief in Haiti to claim these donations on their 2009 income tax returns (i.e., the returns they are completing this season).

Taxpayers who itemize deductions on their 2009 income tax return qualify for this special tax relief provision, enacted January 22, 2010. Only cash contributions made to these charities after January 11, 2010, and before March 1, 2010, are eligible. This includes contributions made by text message, check, credit card or debit card.

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 January 12, 2010, earthquake in Haiti. Taxpayers have the option of deducting these contributions on either their 2009 or 2010 income tax returns, but not both.  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.  See IRS Publication 501 for more information, or consult your professional tax advisor or tax preparer.

Taxpayers should be sure that their contributions go to qualified charities. Most organizations which are eligible to receive tax-deductible donations are listed in a searchable online database available on www.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. Donors can find out more about organizations helping Haitian earthquake victims from agencies such as USAID.

The IRS announcement reminds donors that contributions to foreign organizations generally are not deductible. IRS Publication 526, Charitable Contributions, provides additional information on making contributions to charities. Also consult your professional tax advisor or tax preparer for additional information.

Federal law requires that taxpayers keep a record of any deductible donations they make. For donations made by text message, the IRS advises that a telephone bill will meet the record-keeping requirement if it shows the name of the donee organization, the date of the contribution and the amount of the contribution. For cash contributions made by other means, be sure to keep a bank record, such as a cancelled check, or a receipt from the charity showing the name of the charity and the date and amount of the contribution. IRS Publication 526 has further details on the record-keeping rules for cash contributions.  Otherwise, consult your professional tax advisor or tax preparer for more information.

This year’s special Haiti relief provision is modeled on a 2005 law that, in the wake of the December 26, 2004, Indian Ocean tsunami, allowed taxpayers to deduct donations they made during January 2005 as if they made the donations in 2004.