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Legislators Take Action on Education, Charitable and Research Incentives

February 20, 2015

Leaders of the tax-writing committees continue to express determination in overhauling the federal tax code. In the meantime, they are working on individual legislative items considered to be easily achievable. Among those items, they have moved legislation that would make permanent the rule allowing certain tax-free distributions from individual retirement accounts (IRA) for charitable purposes; stimulate new agricultural research by enabling charitable partnerships between universities and private entities; and improve 529 college savings plans.

On February 12, the House of Representatives passed H.R. 644, the Fighting Hunger Incentive Act of 2015, which would:

  • Make permanent the IRA rollover.
  • Encourage donation of real property for conservation.
  • Enhance deductions for the contributions of food inventory.

While the House approved the $11 billion legislation 279-137, the White House has threatened to veto the package because the cost is not offset. The Senate has yet to consider the bill.

The House Ways and Means Committee passed legislation to improve 529 savings plans, which the Obama administration had proposed eliminating earlier this year. After significant public outcry, the White House abandoned its proposal. H.R. 529, which is expected on the floor this week for a full House vote:

  • Clarifies that computers are a qualified expense for 529 account funds.
  • Removes current distribution aggregation requirements, "eliminating an unnecessary paperwork burden for 529 plan administrators," according to its co-sponsors.
  • Permits the re-deposit of refunds from colleges without taxes or penalties provided the refund occurs within 60 days of the student withdrawing from the college.

The committee also voted to make permanent the deduction of state and local general sales taxes (H.R. 622) and simplify and make permanent the research credit (H.R. 880).

On the other side of Capitol Hill, the Senate Finance Committee approved legislation that allows for the creation of new tax-exempt agricultural research organizations by leveraging private dollars to create charitable partnerships between universities and private entities.

The bill was considered approved together with 16 other bills, which Senate Finance Committee Chairman Orrin Hatch (R-UT) plans to combine into a single bill. He and Ranking Member Ron Wyden (D-OR) said they want to ensure the full Senate considers the legislation in a bipartisan manner. The committee plans to hold similar markups of additional non-controversial tax bills soon.

Contact

Liz Clark
Director, Federal Affairs
202.861.2553
E-mail