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Bipartisan Legislation Restores Charitable Giving Incentives

President Obama recently signed into law bipartisan legislation that addresses several charitable nonprofit policy issues. Approved by the Senate as the Consolidated Appropriations Act, 2016, the bill permanently restores the following expired charitable giving incentives:

  • The food donation tax deduction. This tax incentive increases the charitable giving limit and permits small businesses that donate wholesome surplus food to a qualified nonprofit organization to receive the same enhanced tax deduction C corporations are allowed to take. In addition, the provision also raises the limit for business donations to 15 percent of adjusted gross income, as well as helps farmers and ranchers via a new special rule for assessing food inventory.
  • The enhanced tax deduction for conservation easement donations. This tax incentive has assisted land trusts work with modest-income landowners to increase voluntary land conservation to more than a million acres per year.
  • The individual retirement accounts (IRAs) charitable rollover option. This tax incentive permits individuals 70½ and older to contribute up to $100,000 from their IRAs directly to charitable nonprofits. The provision has supported charitable organizations like social service programs, arts and cultural institutions, and healthcare providers.

The bill also makes permanent the following tax credits that were set to expire at the end of next year:

  • Child tax credit,
  • American Opportunity tax credit; and
  • Earned income tax credit.

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