Haiti Earthquake Relief Donations May Be Deducted on 2009 Returns

On Jan. 22, 2010, President Obama signed into law H.R. 4462 which allows taxpayers to claim a charitable contribution deduction in tax year 2009 for donations made after Jan. 11, 2010 and before Mar. 1, 2010, for the relief of victims in areas affected by the Jan. 12, 2010 earthquake in Haiti. This option is available only if the contribution is in cash and otherwise meets the requirements for charitable contribution deductions under Code Sec. 170.

Anyone contemplating making a contribution to help victims of the earthquake in Haiti should consider doing so before Mar. 1, 2010. An individual who itemizes, will then be in a position to deduct the contribution in either 2009 or 2010, whichever produces the greater tax savings. While tax savings will be realized sooner if 2009 is chosen, a taxpayer may not want to choose 2009 if more taxes would be saved in 2010, taking into account highest marginal tax brackets in each year. As always, be sure to speak with your tax advisor to assess your specific circumstance.