On Friday, the IRS announced the procedures for taxpayers to follow to take advantage of the recently enacted Philippines Charitable Giving Assistance Act, P.L. 113-92, which allows taxpayers to take deductions for cash contributions to qualified charities for the relief of victims of Typhoon Haiyan on their returns for the 2013 tax year (IR-2014-46).
The law, which was enacted March 25, allows these deductions to apply to 2013 for contributions made on or after March 26 until April 14. Text message, check, credit card, and debit card contributions all qualify. For a taxpayer to qualify for a deduction on a 2013 return, credit card contributions must be made by midnight on April 14, and contributions by check must be mailed by April 14. Eligible contributions can be claimed on either a 2013 or 2014 return, but not both. The deduction can be claimed only by taxpayers who file Schedule A, Itemized Deductions, with their return. Taxpayers who take the standard deduction are not eligible.
Donations of property do not qualify for this special treatment, and donations directly to individual victims are not deductible contributions. The IRS reminds taxpayers that their contributions must be made to qualified charities, a list of which is available on the IRS website. Some organizations will not be listed on the website, such as churches and governments, even though they are qualified to receive contributions. Donations to foreign charities usually are not deductible.
Both the Code and the new law require taxpayers to keep certain records of their charitable contributions to be eligible for the deduction in all cases. For text message donations, a telephone bill is sufficient if it shows the name of the charity and the date and the amount of the contribution. For cash contributions made other than by text message, taxpayers should keep a bank record, such as a cancelled check, or a receipt from the charity showing the charity’s name and the date and contribution amount. For donations of $250 or more, taxpayers must obtain a written acknowledgment from the charity.
Sally P. Schreiber (
) is a JofA senior editor.