The American Taxpayer Relief Act was signed into law by President Barack Obama on Thursday, averting the government's "fiscal cliff" and preserving two items of interest to evangelicals–a tax deduction for charitable giving and a tax credit for adoption.
Baptist Press reports how the bill preserved and extended a tax credit to adoptive families that was set to expire at the end of the year, though overall nonprofits have mixed feelings about the bill.
But Americans in the highest tax brackets will face new limitations, possibly lessening their charitable giving as certain tax deductions will be phased out beginning in 2013.
The Evangelical Council on Financial Accountability (ECFA) says these limits "ultimately discourage greater levels of giving to charitable organizations." According to ECFA:
Although none of the major proposed restrictions were placed on the charitable deduction, the "Pease" limitations—phasing out deductions for charitable giving, mortgage interest, and state and local ...1