Bailout Bill and Tax Extenders Become Law: IRA Charitable Rollover Extended

Posted from NCNA policy update:

On October 3, President Bush signed into law the Emergency Economic Stabilization Act of 2008 (HR 1424), the highly controversial $700 billion bailout bill that also became the vehicle for resolving the long-standing Senate and House stalemate on paying for the tax extenders. The Senate tacked the $150 billion tax extenders package on to the bailout bill, which the House then passed with - among other things - the critical one year patch for the alternative minimum tax (AMT) to prevent taxes from increasing on many higher income families never intended to be covered by the AMT.

The tax extenders package included the IRA Charitable Rollover which allows taxpayers to make tax-free contributions from their IRA plans to qualified charitable organizations. Other charitable giving incentives extended include a charitable deduction for business contributions of food inventories; and enhanced charitable deductions for contributions of book inventories and qualified computer contributions. The bill extends these provisions through 2009, effective for distributions after December 31, 2007.

Midwest flood disaster relief included temporary tax relief provisions ending on December 31, 2008, that mirrored the Katrina relief: providing for enhanced corporate and individual charitable contribution deductions, an enhanced charitable mileage rate at 70% of the standard mileage rate, and an income tax exclusion for volunteer mileage reimbursements - but the latter two are limited exclusively to volunteers providing relief in ten Midwestern states due to floods, tornadoes, or severe storms that occurred between May 20 and August 1, 2008.