Congress Faces Key Matters for Charities and Donors After Break

As Congress returns to work this week after its December break, lawmakers will be taking up several key issues important to charities and donors.

Among them:

Estate tax. In 2001 Congress passed the current estate-tax law, which gradually phased out the tax through 2009 and repealed it for 2010. However, in 2011 the current law is set to expire and estate-tax levels that applied years earlier at higher rates are scheduled to go back into effect.

The House of Representatives last month passed a bill that would eliminate the 2010 repeal and permanently keep the estate tax at levels that were in effect in 2009.

Because the Senate has not yet voted on the provision, no estate tax exists currently.

The estate tax that applied in 2009 allowed heirs to exempt $3.5-million ($7-million for couples) and face a top tax rate of 45 percent. The estate tax that is scheduled to apply in 2011 would provide an exemption of $1-million and a top tax rate of 55 percent.

Many nonprofit officials say an estate tax encourages charitable giving by allowing people to decrease the tax liability on inherited wealth.

Health care. The House and Senate are working to merge their separate bills to overhaul the health-care system.

Provisions currently in both bills would require larger nonprofit employers to offer their workers health insurance or pay a tax. The Senate bill would allow small nonprofit groups to qualify for tax credits if they offer health coverage to employees, but the House bill offers such credits only to for-profit employers.

The Senate bill also adds new requirements for tax-exempt hospitals. One would have such hospitals conduct a “community health needs assessment” every three years.

For details, go to: http://philanthropy.com/premium/articles/v22/i05/05001902.htm.

Charitable Tax Incentives. The House in December approved legislation that would extend for another year a variety of charitable tax incentives that expired at the end of 2009. The Senate has not voted on the proposal.

The legislation would allow people age 70 1/2 and older to again make charitable donations of up to $100,000 a year from their individual retirement accounts without having to pay taxes on the distribution.

The measure would also extend tax incentives to encourage donations of property, food inventory, books to public schools, and computer equipment for educational purposes.

Pensions. Congress has not acted on a bill introduced by two House members that would ease rules that govern how charities and other employers make payments to defined-benefit pension plans, which provide specific amounts of money to retired workers.

The stock-market crash has left many nonprofit groups struggling to set aside money for future payments to retired employees.

Volunteerism. The House last month passed a jobs bill that included $200-million in fresh money for AmeriCorps, the national-service program. The Senate has not taken up the measure.

The money, provided in the Jobs for Main Street Act, would allow AmeriCorps to add 25,000 members as part of a broader effort to tackle the country’s high unemployment rate by creating and saving public-service jobs.

Meanwhile, the Senate has yet to confirm the nomination of Patrick Corvington, a senior associate at the Annie E. Casey Foundation, as chief executive of the Corporation for National and Community Service. A Senate committee approved the nomination in December, but the full Senate left for its holiday recess without acting on it.

The national-service agency has been without a permanent chief executive since David Eisner left more than a year ago.