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September 29, 2008

Charity Tax Breaks Stall in Congress

Leaders in the U.S. House of Representatives have announced they will adjourn without reconciling a set of tax breaks, including several measures that would affect charitable giving, with a bill passed earlier this month by the Senate.

After several months of difficult negotiations, the Senate early last week passed its version of legislation that would renew a variety of tax breaks, such as allowing older donors to get a tax break when they give charities money from their individual retirement accounts.

Until December 31 of last year, donors age 70 1/2 or older were able to transfer up to $100,000 to charity from their individual retirement accounts each year without paying income taxes on the money. The Senate’s legislation would renew the provision retroactive to January 1, 2008, and extend it to the end of 2009.

Additional provisions in the Senate legislation would renew and extend other breaks related to charitable giving, including special deductions that businesses may take for gifts of food and donations of books and computers to schools.

The legislation also has provisions that would create tax incentives for charitable giving to help victims of summer storms, tornadoes, and floods in the Midwest.

But the House passed differing versions of those measures.

The White House had threatened to veto the House’s version of the tax cuts.

— Eric Kelderman

Monday September 29, 2008 | Permalink

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