Under the temporary rules put into place by the Katrina Emergency Tax Relief Act (KETRA), taxpayers are allowed to deduct charitable cash donations made between Aug. 28 and Dec. 31, 2005, to qualified charities at up to 100 percent of their adjusted gross income. The temporary change in the Federal Tax Code in the wake of Hurricane Katrina may provide a short-term boon for congregations and a variety of ministries affiliated with the Episcopal Church.

The enhanced tax deduction can be applied on donations made within the specified period to any qualified not-for-profit organization, not just those specifically involved in hurricane relief efforts. In crafting the legislation, Congress decided that a key goal of KETRA was to ensure that charities in general don’t suffer from a downturn in giving, as many did following the Sept. 11 terrorist attacks.

Under the old rules, which generally limited deductions for cash gifts to charities each year to 50 percent of a taxpayer’s adjusted gross income, churches and charities might have been faced with a shortfall in receipts as tax considerations forced people to curb their giving at year’s end, according to Malaika Kamunanwire of Episcopal Relief and Development (ERD).

A drop in donations at this time would be most unfortunate, Ms. Kamunanwire said, because in addition to Hurricane Katrina, ERD is also seeking to respond to recent disasters elsewhere in the world, such as the earthquake in Pakistan and severe floods and mudslides throughout Central America.

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