The good news: President Obama’s new jobs bill, released Monday, includes nonprofits in its tax credits that go to companies that hire veterans and long-term unemployed people. The tax credits would apply to payroll taxes, which nonprofit employers pay, instead of to income taxes. An employer could get a tax credit of $2,400 for hiring a veteran who has been unemployed for at least four weeks and $5,600 for a veteran who has been out of work for at least six months. It could get a tax credit of up to $4,000 for hiring any other individual who has been unemployed for at least six months.
The bad news: President Obama’s job bill also includes $467 billion in tax code changes he proposes to use to pay for the bill. The offsets include a 28 percent cap on itemized deductions – including the charitable deduction – for individuals earning more than $200,000 a year and households earning more than $250,000 per year. The cap on individual deductions is expected to generate $400 billion in revenue over 10 years. House Republicans have rejected the proposed offsets, noting that members of Congress from both parties have rejected these proposals in the past.
Please contact your Members of Congress to let them know that this is a time to preserve the capacity of the not-for-profit sector to serve communities by protecting incentives for charitable giving!