Haiti Donations and State Tax Returns
Taxpayers who take advantage of the new federal law that allows them to deduct qualifying 2010 cash donations toward the Haiti relief effort on their 2009 returns, may have to adjust their 2009 state returns to remove the deduction if state tax law does not follow federal law and the 2009 state return is affected.
To date, The Tax Institute has verified that the following states do not follow federal law in regards to Haiti relief effort donations made in 2010 at this time, although legislation is pending in some states.
Tax preparers in these states should ensure that their clients’ state returns are properly prepared. Also, when preparing the 2010 return, it is important to ensure that the Haiti relief effort 2010 donations claimed on the 2009 federal return are not again claimed on the federal. Please note that these donations may be deductible on the 2010 state return if the 2009 donation was added back.
The Tax Institute will continue to monitor this situation and provide updates as more states that do not follow federal law on this issue are identified.
To date, The Tax Institute has verified that the following states do not follow federal law in regards to Haiti relief effort donations made in 2010 at this time, although legislation is pending in some states.
- Arkansas (AR)
- Arizona (AZ)
- Colorado (CO)
- Hawaii (HI)
- Iowa (IA)
- Kentucky (KY)
- Minnesota (MN)
- West Virginia (WV)
- South Carolina (SC)
- Wisconsin (WI)
Tax preparers in these states should ensure that their clients’ state returns are properly prepared. Also, when preparing the 2010 return, it is important to ensure that the Haiti relief effort 2010 donations claimed on the 2009 federal return are not again claimed on the federal. Please note that these donations may be deductible on the 2010 state return if the 2009 donation was added back.
The Tax Institute will continue to monitor this situation and provide updates as more states that do not follow federal law on this issue are identified.