Friday, October 7, 2011

Charitable Deduction Cap Nixed From Jobs Bill

A proposed cap on charitable deduction has been nixed from the American Jobs Act by Senate majority leader Harry Reid (D-Nev.).  The cap, which was strongly opposed by many nonprofit leaders, would have limited the deductibility of charitable contributions for individuals earning more than $250,000, from 35 percent to 28 percent.  It was President Barack Obama's fourth attempt at the cap, each time to pay for a specific bill.  The jobs bill will instead be paid for by a 5.6-percent surtax on individuals earning more than $1 million a year.

The news was met with joy from nonprofit leaders, including Independent Sector (IS) president and CEO Diana Aviv.  She released the following statement to supporters this morning:

“Our assiduous efforts to share with lawmakers concerns about a cap, combined with your outreach to members of Congress to explain why tax incentives for charitable giving are critical to nonprofits and the people in our your community, made a real difference.  In fact, many lawmakers on both sides of the aisle have indicated that they do not support a cap on charitable contributions.”
Despite its removal from the Senate bill, capping charitable reduction still remains a part of the president's recommendations to the Super Committee, which is tasked with finding at least $1.2 trillion in deficit reductions by Nov. 23.  Nonprofit executives like Aviv remain focused on getting the administration to take it off the table completely.  Stay tuned to The NonProfit Times for any further updates on this subject.

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