Early Tax Deduction for Haiti Relief Passes Congress

Taxpayers will be able to deduct donations for Haiti earthquake relief on their 2009 returns instead of waiting until 2010, under a bill approved by Congress.
By: Margaret Collins: Bloomberg.com
“This legislation is an additional incentive for Americans to contribute,” Finance Committee Chairman Senator Max Baucus, a Democrat from Montana, said in a statement.

The Haiti Assistance Income Tax Incentive Act passed unanimously in the Senate today. The House unanimously adopted a similar bill yesterday. President Barack Obama will sign the measure into law, said White House spokesman Josh Earnest.

The legislation allows taxpayers to claim charitable contributions to relief efforts until March 1 as deductions on their 2009 tax returns. Taxpayers generally can deduct donations up to 50 percent of their adjusted gross income, said Eric Smith, a spokesman for the Internal Revenue Service. It may be possible to carry over contributions above that amount for up to five years, he said.

The American Red Cross has raised $25 million as of yesterday out of $137 million overall from the “Text Haiti” appeal that lets mobile-phone users make a $10 donation via text message, said spokeswoman Megan Allday in an e-mail. Those who give money by text can use a phone bill as proof of a donation.

A 7.0-magnitude earthquake struck the poorest country in the Western Hemisphere earlier this month, destroying about a third of buildings in its capital of Port-au-Prince, the city’s sea port as well as water and sewage systems. The Haitian government has buried more than 72,000 bodies and the overall death toll may be higher than 200,000, Prime Minister Jean-Max Bellerive said Jan. 19.

Congress unanimously passed similar tax deduction legislation in 2005 after the tsunami along the Indian Ocean.

“This measure encourages Americans to give to the Haitian relief effort immediately,” said Senate Majority Leader Harry Reid, a Democrat from Nevada, in a statement.