Publications

• 30 Second Ideas
• Accounting Updates
• Alerts
• Articles
• Business Surveys
• Construction Edge
• Healthcare Edge
• Insurance Edge
• Legal Talent
• Manufacturing Edge
• Not-for-Profit Edge
• Quick Links & Good Ideas
• SEC Edge
• Strategy Insights Blog
• Surviving the Upturn
• Tax Highlights

Contributions for Haiti Earthquake Relief

Recently passed legislation allows taxpayers who itemize deductions to accelerate the benefit for qualified contributions to charities providing disaster relief in Haiti. Cash contributions made for Haiti earthquake relief after January 11, 2010 and before March 1, 2010 may be deducted on the taxpayer’s 2009 or 2010 federal tax return.

Contributions must be made specifically for relief for victims in areas affected by the January 12 earthquake and must be made to a domestic charitable organization that is assisting Haiti. The taxpayer must have written communication from the charitable organization showing the name of the charity and the date and amount of the contribution when the contribution exceeds $250. The new law also allows individuals who make cash contributions via text message to substantiate their contributions with their telephone bills.

In addition, the IRS designated the Haiti earthquake as a qualified disaster. Therefore, any amount received by an individual as a qualified disaster relief payment is excluded from the individual’s gross income. The designation also permits employer-sponsored private foundations to provide relief to their employees or their family members who are victims of the disaster. Otherwise, the payments could result in taxable compensation to the employees.

For tax years beginning after 2009, the limitation on itemized deductions for higher-income individuals has been repealed. For the 2009 tax year, the limitation is reduced by two-thirds. Consequently, some individuals may find it more beneficial to claim Haiti earthquake relief contributions on their 2010 returns filed in 2011 rather than claiming the contribution as a deduction on their 2009 returns. If you have any questions about the accelerated tax deduction or charitable contributions in general, please contact our office.

For more information, contact Mike Calahan at 312-980-2996, Kira Wheat at 312-980-3331 or your Blackman Kallick representative.
 

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.