Government Relations

Legislative Bulletin

April 30, 2009

Congress Adopts FY 2010 Budget Resolution, Includes Provisions on Charitable Giving

Both the House and Senate have approved a fiscal year 2010 budget resolution, which contains a number of provisions related to charitable giving. The budget resolution is a non-binding document, setting out a blueprint for how Congress will move major legislation over the next year and how much discretionary spending will be available through the annual appropriations process. Relevant provisions include:

IRA Charitable Rollover Expansion. The resolution calls on Congress to pass legislation that extends “incentives for enhanced charitable giving from individual retirement accounts, including life-income gifts.” This language was originally added to the Senate-passed budget resolution by Sen. Byron Dorgan (D-ND), sponsor of the Public Good IRA Rollover Act of 2009. The Partnership is delighted the IRA Rollover language was retained in the final budget resolution. It represents a significant recognition by Congress of the importance of providing Americans with increased options for charitable giving, especially in this turbulent economic time.

Extension of Current Estate Tax Level. The resolution provides for a permanent extension of the estate tax at 2009 levels (thus doing away with the 2010 repeal). Under such an approach, individuals could exempt $3.5 million from taxes ($7 million for couples), with amounts above that taxed at 45 percent. The exemption threshold would also be adjusted for inflation in future years.

Other Major Tax Provisions. The resolution calls for three additional years of Alternative Minimum Tax (AMT) relief, without revenue offsets, although statutory Pay-As-You-Go requirements may come into play thereby forcing lawmakers to offset the AMT with provisions that raise money for the federal government. Also, the resolution provides for a permanent extension of the 2001 and 2003 tax cuts for those taxpayers with incomes below $250,000.

Now that Congress has approved a final budget resolution, the Partnership is poised to continue its work with lawmakers as well as the Obama administration on the creation of national tax policy that provides strong incentives for charitable giving.