Haiti Donations: New Rules for Getting a Tax Deduction

(MoneyWatch) 

Donate to a charity helping Haiti earthquake victims before March 1, and the Internal Revenue Service has some relief for you.

Under a new law, you can actually write off a 2010 Haiti donation on your 2009 tax return if you itemize. (You can put the donation on your 2010 return next year if you prefer.) “This is quite unusual,” says Tom Ochsenschlager, vice president of taxation for the American Institute of Certified Public Accountants. “But there are a number of requirements to qualify for this break.”

Here are the five key rules:

• Your donation must be dated no later than February 28. That means, if you’re mailing a check, the postmark will need to be the 27; the 28^th is a Sunday and post offices will be closed.
• Your gift must be cash. Donations of clothes or other goods won’t qualify.
• The charity must qualify as tax-deductible according to the IRS. The agency’s Publication 78 has a list of many approved groups. Churches, synagogues, mosques and government agencies are also eligible, even if they are not listed in Publication 78. But contributions made to foreign organizations generally are not deductible, so if you have your eye on a foreign charity, check to see if they have an American subsidiary. (For example, you can’t claim a deduction for a donation directly to Médecins Sans Frontières, but you can deduct a gift to Doctors Without Borders.)
• You must be able to prove the donation was for Haiti relief. Be sure you have documentation that your contribution was earmarked to help victims of the Jan. 12 earthquake. The Clinton Bush Haiti Fund qualifies, and MoneyWatch blogger Kathy Kristof has noted some other groups worth considering. For contributions made by cash, check, credit or debit card, you’ll need either a bank record such as a cancelled check, a credit card statement, or a receipt from the charity. A receipt should show the name of the charity, the date of your donation and amount you gave. And if you zapped a text-message donation from your cell to the American Red Cross, United Way, or Catholic Relief Services, a phone bill will satisfy the recordkeeping requirement, as long as it has the required documentation for receipts.
• Donations of $250 or more will demand additional documentation. For these gifts, you’ll also need written acknowledgment from the charity showing whether the organization provided any goods or services in exchange for the gift.

Check back on MoneyWatch.com every day between March 1 to April 15: We’ll be giving you a tax tip a day.

More on MoneyWatch:

• 10 Tax Deductions for This Year’s Return
• Haiti Quake: How to Help
• Charities Faking Numbers to Look Good
• Donating Property to Charity: Dos and Don’ts
• Video: Charity Donations — How to Give Smarter