Legislation passed by Congress on New Year’s Day to address the so-called “fiscal cliff” crisis simply delayed the resolution of big issues that affect charities, an advocacy group says.
“Nonprofits must remain vigilant during the next couple of turbulent months and be prepared to mobilize to lift their voices to federal policymakers,” the National Council of Nonprofits says in a statement.
The law, for example, postponed for two months, until March 1, sweeping spending cuts from nearly every federally funded domestic program, cuts that “will reduce funding without reducing the underlying human needs, there by increasing demands on nonprofits in local communities while also decreasing resources for nonprofits to provide needed services,” the Council says.
Decisions on those cuts made for fiscal 2013 “will have a rippled effect on spending levels for the next decade, underscoring the urgency of this issue,” the Council says.
And while the law passed on January 1 does not significantly change the charitable deduction, the Council says, “most experts expect deductions to become featured more prominently on the chopping block in the looming debates ahead as Congress and [President Obama] look for ways to increase government revenues while addressing budget and tax reform in the coming months.
The law restores the Clinton-era limit on itemized deductions and trims the deductibility of most itemized deductions, including charitable deductions, by three percent of adjusted gross income above a specified threshold, or by 80 percent of a person’s itemized deductions, whichever is less.
The law retroactively restores the tax incentive for giving by older Americans by letting them give to charities their mandatory Individual Retirement Account distributions taken in December 2012 or January 2013, and apply the rollover their 2012 tax filing, the Council says.
It says the law also restored conservation easements retroactively and renewed them through 2013, and continues tax provisions that benefit low-income families many nonprofits serve.
The Council also says law extends for five years tax credits for college tuition and the working poor that benefits 25 million low-income families; extends for one year federal benefits to the long-term unemployed; delays cuts in reimbursements to medical personnel under Medicare; and extends funding through the fiscal year that ends September 30 for agricultural programs, including food stamps.
— Todd Cohen