Health Care Reform Benefits Small Nonprofits
Hidden from the discourse during America's year-long health care debate is the benefits the bill passed by the House of Representatives will provide to small nonprofit organizations. The Chronicle of Philanthropy reports on the tax credits available to some charities:
By adopting the Senate version of the major health-care overhaul, the House agreed that both nonprofit groups and businesses could qualify for tax credits. The original House bill offered only income-tax credits to small employers, which would not have helped tax-exempt groups.
The final bill...allows nonprofit groups to apply the credit to certain payroll taxes, like the money withheld from employee checks for Medicare. The provision applies to employers with no more than 25 full-time employees and average wages below $50,000.
There are over 1.5 million registered nonprofit organizations in the United States, and only a small percentage of those have a wide fundraising base and mass cultural appeal. The majority have under 25 employees and low average wages, which allow them to utilize this tax credit.