The House passed a package of tax breaks Thursday designed to boost charitable donations by seniors, private foundations and procrastinators.
One provision provides tax breaks to people over 70 who make donations from their individual retirement accounts. Another reduces excise taxes on private charitable foundations.
Procrastinators would be able to claim tax deductions for donations made after the end of the year, as long as they were made by April 15. Other provisions provide tax breaks for landowners who donate land for conservation purposes, and businesses that donate food to food banks.
The White House threatened to veto the bill because it would add $16 billion to the budget deficit over the next decade. In a statement, the White House criticized House Republicans for supporting tax breaks that mainly benefit wealthier Americans while refusing to help low-income families by extending unemployment benefits for the long-term unemployed.
The vote was 277-130 to pass the bill. Fifty-six Democrats joined 221 Republicans to vote in favor of the bill.
“The good will of the American people is unmatched, and we should do everything we can to encourage Americans to give more, enabling charities, nonprofits, foundations and schools across the country to expand their reach and serve those most in need,” said Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee.
Sue Santa of the Council on Foundations said the bill “could strengthen charitable giving and give certainty to both donors and to the foundations.”
The bill now goes to the Senate, where it is likely to get caught up in a debate over how to deal with a package of temporary tax breaks that expired at the beginning of the year. More than 50 temporary tax breaks expired in January, including several provisions in the bill passed Thursday.
The Republican-led House has voted to make a handful of them permanent, leaving the fate of others uncertain.
The Democratic-controlled Senate is taking a different approach. Instead of making them permanent, senators have been working on a package that would extend nearly all the temporary tax breaks through 2015.
The impasse is likely to last until after congressional elections in November.
The provision to benefit late donors has been popular as a way to boost donations for natural disasters that happen around the beginning of the year. In 2010, Congress extended the deadline to donate to relief efforts for earthquakes in both Haiti and Chile.
Under current law, donations must be made by Dec. 31 for taxpayers to claim the deduction on that year’s tax return. Santa said extending the deadline to donate until April 15 would provide a natural time for donors to give — when they are filling out their tax forms.
The provision would save taxpayers $2.8 billion over the next decade, according to the Joint Committee on Taxation, the official tax scorekeeper for Congress.
The biggest tax break in Thursday’s bill affects donations from individual retirement accounts. If you have an IRA, you must start taking minimum distributions six months after you turn 70. The amount depends on your age and the amount of money in your IRA.
For traditional IRAs, those distributions are taxable.
A temporary tax break that expired in January allowed seniors to avoid paying taxes on those distributions by donating them to charity. The bill passed Thursday would renew the tax beak and make it permanent.
The exemption is capped at $100,000 a year.
The tax break is popular among seniors with the means to make donations, Santa said. It would save them $8.4 billion over the next decade, according to the Joint Committee on Taxation.
(AP)
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One Response
Does President Ovomit even hear what he is saying? He would veto it because it benefits the wealthy. Hilarious! ! Giving charity to food banks and natural disaster victims benefits the wealthy? The man is so knee jerk adverse to tax breaks that he says these preposterous statements. How many days left until he fades away?