Estate Tax
The federal estate tax is an essential source of revenue for the federal government and serves as an incentive for wealthier individuals to give back to their communities through charitable nonprofit organizations.
Why It Matters
The federal estate tax generates significant revenue for the operations of the federal government and encourages giving to the work of charitable nonprofits. The Giving USA Foundation estimates that in 2020, Americans donated $43.21 billion through charitable bequests.
Where We Stand
The National Council of Nonprofits support[s] tax and other incentives at all levels of government that encourage individuals to … contribute money to the missions of charitable nonprofits.
- National Council of Nonprofits Public Policy Agenda
Status
The 2017 federal tax law maintains the estate tax, but doubles the exemption to about $11 million for individuals and about $22 million for couples, effective through 2025. The change is estimated to reduce federal revenues by nearly $100 billion over ten years and lower charitable giving by an estimated $4 billion per year.
Related Insights & Analysis
- Federal Tax Law - Tax Cuts & Jobs Act, National Council of Nonprofits
- Federal Charitable Giving Incentive, National Council of Nonprofits
Additional Resources
- Giving USA
- American Taxpayer Relief Act of 2012 Section 101(c)
