LIFT for Charities Act Reintroduced in the Senate and House

The Lessening Impediments from Taxes (LIFT) for Charities Act was recently reintroduced in the Senate by Senators James Lankford (R-OK) and Chris Coons (D-DE) in an effort to repeal the provision in the new tax code that taxes churches and nonprofits on employee benefits such as parking and transportation benefits. The companion bill from Representative Mark Walker (R-NC) followed in the House of Representatives just days later.

“Tax reform was designed to help simplify the tax code and reduce burdens on small businesses, not add burdens on nonprofits,” said Senator Lankford. “The law now requires some churches and some nonprofit organizations to pay new employee benefit taxes. Most nonprofits are not equipped to handle the additional compliance burden. Many, if not most, churches have never had to fill out IRS Form 990s. The legislation introduced today would eliminate this problem once and for all.”

Senator Coons added, “Nonprofits are organized around a cause, mission, or community need, and employees of nonprofits often have the same access to parking and meals that others in the community have because the nonprofit serves the whole community. Requiring these organizations to pay a federal tax on these employee benefits, something they have never been required to do before, will cause them to not only face an increased operating cost, but also an administrative burden. I am proud to join Senator Lankford in addressing this unfair and burdensome tax, and I urge my colleagues to consider this important piece of legislation so that America’s charitable nonprofits and houses of worship are able to continue providing critical services to communities without undue burden.”

“Churches and charities serve on the frontline of our battle against the generational cycles of poverty and the traps of government dependence,” said Representative Walker. “Washington should ensure their work in our communities is not restricted by unnecessary taxes and strenuous compliance processes. The LIFT for Charities Act will maintain that nonprofits and places of worship remain uninhibited by federal burdens.”

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This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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