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Tax Incentive for Generous Giving in the U.S.

In the aftermath of Hurricane Katrina, Congress looked for ways to encourage the greatest possible generosity among the American population and settled on the Katrina Emergency Tax Relief Act (H.R. 3768). KETRA upped the annual deduction limit from 50 percent to 100 percent of adjusted gross income for ANY outright cash contributions made to ANY public charities between August 28 and December 31, 2005. Such contributions also are exempt from the three percent reduction in itemized deductions for individuals with adjusted grow income over $145,950.

Importantly, the enhanced charitable deductions for individual cash donations applies to all charities, not just those engaged in work related to Hurricane Katrina. In fact, as Senator Charles Grassley, sponsor of KETRA explained, Congress was concerned that the outpouring of gifts in response to the Katrina tragedy would leave local charities – including congregations – in the lurch. So the law was written to include all charitable gifts made to any charity from the day Katrina made landfall to the last day of 2005.

For further details about KETRA, go to www.independentsector.org/programs/gr/relief.html

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