CA's Budget & Nonprofits: Part Four
05.25.2023 | Linda J. Rosenthal, JD
In a perfect world, federal tax policy would be comprehensively analyzed, thoughtfully debated, and then enacted without partisan rancor or dispute.
We don’t live in that perfect world. For several years, budgets and tax proposals have been held hostage to entirely unrelated political disputes. The result is that even when there are temporary extensions for relatively uncontroversial tax laws, sometimes these extensions expire before another piecemeal, eleventh-hour emergency patch can be cobbled together.
There was some, small good news in Congress’ most recent end-of-year marathon to avoid a shutdown and pass some legislation. But there were also omissions, as well as a partisan gag on a matter in the headlines and generating continued controversy.
This provision permits individuals who are 70-½ and older to donate up to $100,000 from the Individual Retirement Accounts (IRA) directly to charities.
This worthwhile and much-needed incentive authorizes small businesses that donate surplus food to take the same enhanced tax deductions available to regular C corporations.
This tax break allows an enhanced tax deduction for donation of conservation easements.
These charity related deductions were part of a package of dozens of tax extenders made permanent under the Protecting Americans from Tax Hikes (PATH) Act of 2015. Just in time for the Representatives and Senators to flee Washington, D.C. for their Christmas holidays destinations, the measure passed in the House by a vote of 318-109 and in the Senate by a vote of 65-33.
“The charitable sector worked closely with Congress,” according to the Council on Foundations, “to educate members and their staff about the difference these incentives make….Passage of the PATH Act is the culmination of a nearly 10-year-long effort to have charitable tax incentives permanently enacted and, in the case of the food donation tax deduction, expanded. After years of renewal and expiration, … these charitable giving incentives are now permanent law.”
The Council on Foundations noted, also, that –
during the first two years the IRA charitable rollover was available, it prompted more than $140 million in gifts, assisting social service providers, religious organizations, cultural institutions and schools, and numerous other nonprofit organizations. Similarly, according to Feeding America, this legislation would significantly increase food bank access to the 70 billion pounds of nutritious food wasted each year, particularly the 6 billion pounds of produce that does not make it to market. Finally, a survey by Land Trust Alliance showed that the land conservation incentive helped 1,700 land trusts increase the pace of conservation by a third – to over a million acres a year.