House Votes To Allow Tax Breaks for 2010 Haiti Donations on 2009 Returns

By Eugene Mulero, CQ Staff

The House easily passed legislation on Wednesday that would allow taxpayers to claim Haiti earthquake-related charitable deductions on their 2009 tax returns, as long as they make the contributions before March 1. The bill (HR 4462), which passed by voice vote, is sponsored by Ways and Means Chairman Charles B. Rangel of New York. Without the legislation, taxpayers would have to wait until 2011, when they file their 2010 taxes, to take the itemized deduction for any Haiti donations this year.

“What this bill does is allow Americans and others to make generous cash contributions to the charity of their choice and at the same time not have to wait until next year to be able to deduct this as a charitable contribution,” Rangel explained on the floor.

The bill also would allow contributions made via text messages to be deducted. To qualify, filers would need to show a telephone bill to prove the donation, Rangel added.

An official with the American Red Cross said the nonprofit has received more than $22 million in text-based donations from U.S. users for Haiti relief efforts.

The Ways and Means Committee approved the measure Jan. 19. Cosponsors of the legislation include Ways and Means ranking Republican Dave Camp of Michigan, as well as majority Whip James E. Clyburn, D-S.C., and Minority Whip Eric Cantor, R-Va.

“The people of these United States of America are going to call upon us in order to respond to the people of Haiti,” Clyburn said, adding: “And for us to offer all Americans the opportunity to deduct on their 2009 taxes in a contribution they make to this effort . . . will go a long way.”

The measure would decrease federal fiscal year budget receipts by $2 million over the period of fiscal 2010 through 2019, according to an estimate from the Congressional Budget Office. Senate leaders are expected to move ahead with their version of the bill soon, according to a Democratic aide. The Senate version would waive the normal rule that limits charitable deductions to 50 percent of individual adjusted gross income and 10 percent of corporate income.