Sheffield, MA— Berkshire Taconic Community Foundation (BTCF) is pleased to inform area donors and nonprofits that with the passing of the American Taxpayer Relief Act of 2012 (H.R. 8), the charitable deduction will continue to be coupled with an individual’s or household’s corresponding tax rate. There is no cap on charitable deductions. For example, under the new tax law the highest tax bracket will be 39.6 percent. Therefore, affected earners can deduct 39.6 cents for every dollar donated.
Another positive attribute of the new law is the extension of the IRA charitable rollover through December 31, 2013, permitting tax-free distributions to a charity from an Individual Retirement Account (IRA) held by someone age 70 ½ or older of up to $100,000 per taxpayer, per taxable year, retroactive to January 1, 2012. The retroactive extension also allows donors to make distributions directly to eligible charities before February 1, 2013 and elect to have such distributions treated as qualified charitable distributions in 2012. Individuals who have already received an IRA distribution in 2012 can count that distribution as a 2012 IRA charitable rollover if they transfer the amount in cash before February 1, 2013 to an eligible charity. Donor advised funds and private foundations do not qualify for the IRA charitable rollover.
This is good news for Americans who make charitable contributions, but even better news for children and families who receive services from nonprofit organizations that rely on these donations.
Said BTCF President Jennifer Dowley, “we, along with so many others, are relieved that Congress and the White House collaborated to pass this legislation. Many negotiations lay ahead, but meanwhile one layer of uncertainty has been removed.”
Nationally, nonprofits provide 10 percent of America’s workforce, accounting for 13.5 million jobs. Nonprofits account for 5.4 percent of the GDP and 9 percent of all wages paid. Local nonprofit organizations make an important contribution to our quality of life through programs in health, human services, education, arts and culture and the environment—as well as thousands of other programs that enrich our region’s communities. In Berkshire County alone, according to the Center for Creative Community Development (Williamstown, MA) in their recent report The State of Non-profit Organizations in Berkshire County, the nonprofit sector provides over 24,000 jobs and generates over $2.2 billion in economic impact a year.