Background

Charitable giving, and the work and services delivered by the nonprofit sector – which often includes healthcare - represent the best of American generosity and service to the community. It is essential that Congress does not impede the work of nonprofit organizations or compromise the health and well-being of Illinois residents. Yet, H.R.1 includes a series of provisions that directly impact nonprofit organizations and the people and communities we serve – mostly negatively. We urge all public charities to use this form to ask Senators to make the following changes to the House bill. 

(Note: Private foundations should contact officials using the campaign that is limited to the excise tax, which meets the self-defense test.)

Changes Needed in Senate to the House Bill

• Remove higher excise tax on net investment income for private foundations. This will decrease grantmaking in Illinois by almost $200 million, and redirect dollars that would otherwise circulate in the local economy to the Treasury.

• Delete the 1% Floor for Corporate Charitable Contributions. The final House bill includes the 1% floor, meaning corporations could only deduct charitable contributions that exceed 1% of their taxable income. We remain concerned this could lead to a decrease in corporate philanthropy, and combined with #1, will further decrease resources available to communities in IL.

• Protect Child Tax Credits for children who are citizens. Current law makes children with a SSN eligible for the child tax credit, credit even if their parents do not have a SSN. The final House bars parents who are not legal citizens from claiming the credit for their children, even if the child is a citizen. This will increase child poverty.

• Avoid SNAP Cuts. See CBPP’s analysis and graphic. Cuts to SNAP hurt people and retailers.

• Avoid Medicaid Cuts and Shifting Related Costs to States. Many changes are made to Medicaid that will have negative consequences, such as creating a new federal cost-sharing requirement for adult beneficiaries who earn just above the federal poverty limit, Preventing states from increasing taxes on healthcare providers to help cover costs, Reducing the federal cost-share for Medicaid expansion states, if the state allows undocumented immigrants to receive healthcare, even if the state uses their own funds for this purpose (this will certainly impact Illinois). Illinois cannot afford to replace federal investment in health insurance for hundreds of thousands of residents. New work requirements for adults up to age 64 would kick in by end of 2026 or sooner if states opt to do it sooner. Such requirements are generally unnecessary, since most able-bodied adults insured under Medicaid work now. Additionally, folks that are working may make paperwork mistakes (due to relocations , etc.) that result in terminated coverage even if they are eligible. We oppose this provision because it will cause people, including lawfully present immigrants, to lose health care and health insurance and drive up costs. See KFF’s Medicaid provision tracker and CBPP’s analysis.

• Preserve the non-itemizer charitable tax deduction. The final house bill creates a non-itemizer tax deduction up to $150 for individuals and $300 for married couples, regardless of whether the tax filers claim an itemized deduction. This proposal is based on the Charitable Act (H.R.801), a bipartisan bill sponsored by six IL Congressional officials. This is a welcome measure, and we urge Senators to preserve this provision and if possible, expand it to include higher caps.

Take Action NOW

• Use the form to the right on this page to email your Senator. Add a story or data to the form that’s unique to your organization that conveys the impact of one or more of the issues listed above.
• Sign the national letter to protect and strengthen nonprofits in the tax package.

Key Resources

• H.R.1 Bill Text
  • Rules Committee landing page
  • Comparative print (i.e., original version vs. final version)
• H.R.1 Summaries/Analysis from our national partners
  • Council on Foundations (COF)
  • Independent Sector
  • United Philanthropy Forum 
  • National Council of Nonprofits