Today, Congress approved The Protecting Americans from Tax Hikes (PATH) Act, which includes several items that benefit donors, charitable organizations and the communities they serve. In particular, The PATH Act enacts permanent tax incentives for donations of food, land for conservation purposes, and cash from Individual Retirement Accounts.
Why the PATH Act?
Although these policies have been part of the tax code for the nearly a decade, Congress originally approved these policies on a temporary basis. On several occasions, Congress allowed the policies to expire for particular years or renewed late in the year, which limited opportunities to make qualifying donations and left donors uncertain of how these tax incentives would be applied to their contributions.
For years, these tax policies have helped our state’s nonprofits meet Coloradans’ food needs, conserve wildlife habitat and recreational spaces, and encouraged seniors to give back to organizations that make Colorado a great place to live. Nonprofits signed our letters and contacted members of Congress to make their voices heard. We applaud Congress for passing The PATH Act and making these charitable giving incentives available to donors permanently.”
- Mark Turner, Colorado Nonprofit Association, Director of Public Policy
Nationally, since 2006, the incentives have enabled land trusts to conserve over two million acres of land.
"This legislation has been a national policy goal for the Colorado land conservation community for many years,” says Amanda Barker, Executive Director, at the Colorado Coalition of Land Trusts. “We applaud the Colorado Nonprofit Association and the coalition of supporting nonprofits for their efforts to get this passed. The permanent tax deduction is an incredibly valuable tool for Colorado landowners deciding whether to protect their land and water with a conservation easement. We have so much to celebrate today!"
These tax incentives have helped food banks access over 70 billion pounds of nutritious food that would otherwise be wasted and generated hundreds of millions of dollars in IRA gifts to charities.
"Community foundations supporting critical needs in our state rely on the IRA charitable rollover to raise crucial funding each year," said Joanne Kelley, Executive Director of the Colorado Association of Funders, the statewide network for foundations and others supporting philanthropic causes. "We have been working in partnership with others to make this a permanent, year-round option for donors to ensure it has the maximum impact on charitable giving."
The PATH Act also permanently makes several tax credits to help working families including the Child Tax Credit (CTC), the American Opportunity Tax Credit, and the Earned Income Tax Credit (EITC).
If Congress had allowed these policies to expire, nearly 264,000 Colorado families, including 129,000 children, could have fallen into or deeper into poverty when key pieces of the EITC and CTC expire in 2017, according to the Colorado Fiscal Institute.
President Barack Obama is expected to sign The PATH Act before the end of the year. After presidential approval, charitable provisions of the bill go into effect in early 2016.