On February 12, the House passed legislation (H.R. 644) that would
make permanent the IRA charitable rollover and the enhanced deductions for donations
of food and land conservation easements, all of which expired on January 1, as well
as simplify the excise tax rate on the investment income of private foundations.
| Read the Nov. 2014 sign-on letter to Congress
See Tax Reform Comments from Tax Day 2015 | View our Spring 2015 Action Guide
Find notes and recording of our Apr. 2015 Sector-wide strategy call
A number of critical giving incentives that are often included as part of the annual "tax extenders" package expired for the fourth time in recent years at the start of 2014, but were reinstated for the 2014 tax year on December 19, 2014. The package of extenders expired again on January 1, 2015.
The legislative pieces within the America Gives More Act package will help to
promote and resource the crucial work of charitable nonprofits at a time when demand
for nonprofit services continues to rise and outpace donations. These incentives have
proven their effectiveness, yet Congress has allowed them to lapse, creating donor
Charitable giving incentives include:
Senate Finance approves expired giving incentives
The Senate Finance Committee approved legislation on July 21 that would reinstate for the 2015 and 2016 tax years a package of expired tax provisions, which includes the IRA charitable rollover, the enhanced deduction for land conservation easement donations, and the enhanced deduction for food inventory donations.
Charitable tax provisions pass House
On February 12, the House passed the America Gives More Act (H.R. 644), with a veto-proof majority vote of 279 to 139. The legislation packages together bills to extend permanently the IRA charitable rollover (H.R. 637), the enhanced and expanded deduction for donating excess food inventory (H.R. 644), and the enhanced deduction for land conservation easements (H.R. 641). Also included is a bill (H.R. 640) that would simplify to 1 percent the excise tax rate on private foundations’ investment income.
Congress restores giving incentives for 2014 tax year
The Senate signed off on legislation (H.R. 5771) on December 16, 2014 to reinstate retroactively dozens of expired tax provisions, including the IRA charitable rollover and the enhanced deductions for donating land conservation easements and food inventory. While taxpayers will be able to employ these provisions in the upcoming filing season for the 2014 tax year, the package will expire again in roughly two-weeks' time, on January 1, 2015. The House passed the measure on December 3 and the president signed it into law on December 19.
House fails to advance permanent bill for charitable giving incentives
On December 11, the House failed to advance the Supporting America's Charities Act (H.R. 5806), a bill that would have made permanent the IRA charitable rollover and the enhanced deductions for donations of land conservation easements and food inventory. The vote was 275 in favor and 149 opposed, just eight votes shy of the two-thirds supermajority needed under the expedited procedural rule used to consider the legislation.
IS POSITION AND ACTION
Because the IRA rollover and other incentives have come under close scrutiny, Independent Sector is working closely with our members and will support coalitions to make the case for bringing greater certainty to these powerful giving tools.
The set of 55 tax provisions that regularly expire and are reinstated are known collectively as "tax extenders." The package includes three charitable giving incentives: the IRA charitable rollover, the enhanced charitable deduction for food inventory, and the enhanced charitable deduction for land conservation.
After these measures expired at the end of 2011, the American Taxpayer Relief Act of 2012 (ATRA) extended through 2013 and retroactively through 2012 all three of the charitable tax extenders, as well as the basis adjustment to stock of S corporations making charitable contributions of property. The package did not include previously available extenders that offered enhanced deductions for books and computer equipment.
In 2013, some lawmakers in the House signaled a preference to defer to former Ways and Means Committee Chairman Dave Camp's (R-MI) comprehensive tax reform efforts for renewal of their preferred extenders. A lack of legislative action in 2013, however, allowed all extenders to expire on January 1, 2014.
In 2014, lawmakers in both chambers advanced legislation to make permanent only certain tax extenders and extend others only temporarily. The Senate Finance Committee passed by voice vote in April the EXPIRE Act (S.2260), which would have renewed through 2015 the entire extenders package. The bill, however, failed to reach the Senate floor due to partisan disagreement over the amendment process. In July, the House passed the America Gives More Act (H.R. 4719), which would have restored permanently three charitable extenders as well as extended through April 15 the deadline for claiming charitable donations on the previous year's tax filing and simplified to 1 percent the excise tax rate for private foundations' investment income. The Senate did not take up the bill. In December, the House was unsuccessful in passing under suspension of the rules narrower legislation, the Supporting America's Charities Act (H.R. 5806), which would have made permanent only the three charitable extenders.
Unable to reach a longer-term agreement on extenders, the lame duck 113th Congress adopted legislation (H.R.5771) in December 2014 to extend the package of expired provisions, including three charitable giving incentives, retroactively for just the 2014 tax year. The provisions were set to expire again in two-weeks' time, on January 1, 2015.