New Legislation Would Create Tax-Free "Personal Philanthropy Accounts" to Spur Charitable Giving

Senators Johnny Isakson (Republican from Georgia) and Frank Lautenberg (Democrat from New Jersey) recently introduced legislation (S. 3881), which would create tax-free “personal philanthropy accounts” for giving to 501(c)(3) organizations. Under the legislation, individuals would be able to contribute up to $15,000 per year to these personal accounts through an automatic debit from their paycheck before their income tax is calculated and withheld (an “above-the-line deduction”). This would allow the contributions to accumulate and earn interest tax-free. The legislation would also allow employers to match their employees’ contributions.

S. 3881 is largely a place-holder, and we expect a revised version to be introduced next session in both the Senate and House. For a copy of the bill and other supporting documents, just email me.