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 2015, Americans donated $31.8 billion (an increase of $9.1 billion since 2008) through charitable bequests.

Where We Stand

The National Council of Nonprofits supports existing and enhanced incentives at the federal level that encourage individuals to contribute money to the missions of nonprofits and opposing caps or limits on charitable giving incentives.

- National Council of Nonprofits 2017 Public Policy Agenda

Status

The new 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.

Additional Resources

• Resources on How the New Federal Tax Law Impacts Charitable Nonprofits, National Council of Nonprofits
• Federal Tax Law - Tax Cuts & Jobs Act, National Council of Nonprofits
• The Federal Budget Process, National Council of Nonprofits
• American Taxpayer Relief Act of 2012 Section 101(c)