A few days ago, I posted that the House approved the Haiti Relief Bill.  On Thursday, the bill was unanimously approved by the Senate and was signed by President Obama on Friday.

In short, the bill makes most charitable contributions for Haiti Relief to be deducted on qualifying taxpayers 2009 tax return, instead of requiring that they wait until they file their 2010 return in order to obtain the tax benefit.

From the Joint Committee on Taxation Technical Explanation:

The provision permits taxpayers to treat charitable contributions of cash made after January 11, 2010, and before March 1, 2010, as contributions made on December 31, 2009, if such contributions were for the purpose of providing relief to victims in areas affected by the earthquake in Haiti that occurred on January 12, 2010. Thus, the effect of the provision is to give calendar-year taxpayers who make Haitian earthquake-related charitable contributions of cash after January 11, 2010, and before March 1, 2010, the opportunity to accelerate their tax benefit. Under the provision, such taxpayers may realize the tax benefit of such contributions by taking a deduction on their 2009 tax return.

The provision also clarifies the recordkeeping requirement for monetary contributions eligible for the accelerated income tax benefits described above. With respect to such contributions, a telephone bill will also satisfy the recordkeeping requirement if it shows the name of the donee organization, the date of the contribution, and the amount of the contribution. Thus, for example, in the case of a charitable contribution made by text message and chargeable to a telephone or wireless account, a bill from the telecommunications company containing the relevant information will satisfy the recordkeeping requirement.

One thing to note on this bill is that in an extremely rare act of bipartisanship, the bill was passed unanimously in the House and the Senate.  I think that Joe Kristan from the Roth & Company’s Tax Update Blog put it best in Haiti Earthquake Rattles the Tax Law:

“As bad as Haiti is, it’s not the first disaster ever, and one more change to the tax law isn’t going to solve that sad country’s problems. Of course, the proposed changes are more about politicians making a show of concern than actually accomplishing anything.”

The law is going to do very little, if anything, to help the people in Haiti.  I doubt to many people are going to read this and say, “Gee, I wasn’t really going to donate, but since I can deduct it off my taxes for 2009 instead of 2010, here’s a check.”  As Joe put it, it is a “feel good” thing that the politicians are going to make it look like they care.

The House of Representatives voted unanimously to approve a bill that will allow taxpayers to claim charitable donations made related to Haiti relief efforts on their 2009 tax returns rather than waiting until they filed their 2010 returns to claim the deduction.    It also allows taxpayers who sent their donation in via text message to use their phone bill as proof of the contribution.  

These deductions are considered an itemized charitable deduction just as any other charitable deduction is.  It will not be treated differently other than the year that you are allowed to deduct it.

I have not seen details of the actual bill yet, but it is supposed to apply to contributions made between January 12, 2010 and February 28, 2010. 

Keep in mind that this is not a requirement to claim the contribution in 2009.  It is only an option.  Be sure to assess your individual tax situation or discuss with your tax planner to make sure it will not work out better to claim your deduction in 2010.

The Senate has promised that they will pass the bill swiftly as well, and it is expected that President Obama will sign the legislation into law quickly.