A multi-trillion-dollar tax and spending package passed the U.S. House of Representatives by a single vote on May 22nd. The legislation, entitled the “One Big, Beautiful Bill Act”, is now being deliberated in the U.S. Senate. As it’s written, the legislation would extend trillions of dollars in tax cuts for the wealthy while making the largest ever cuts to foundational social safety net programs, Medicaid and the Supplemental Nutrition Assistance Program (SNAP).

But the more than 1,000-page bill contains other provisions of relevance to nonprofits and the people they serve. Below are a few of those provisions, in no particular order:

• Low-Income Housing Tax Credit: The few bright spots in the House’s reconciliation bill are found in the Low-Income Housing Tax Credit (LIHTC) provisions, which include the largest LIHTC expansion in a quarter century. The provisions would restore the 12.5% increase in 9% LIHTC allocations that had expired in 2021. It is estimated that 527,700 additional affordable housing rental homes could be financed between 2026 and 2035 if these provisions are enacted. The National Low Income Housing Coalition supports these provisions, as they would make it easier for developers to use LITHC to build affordable housing in rural and tribal communities and for individuals with extremely low incomes.
• Charitable Giving: The tax bill includes several provisions that would threaten the entire nonprofit sector. It relies on $50 billion in new and increased taxes on the charitable sector to pay for other tax cuts. If enacted, the legislation would significantly raise taxes on foundations, reducing the financial resources available to nonprofits. It would also put new limits on itemized deductions, including the charitable deduction, significantly reducing their value and disincentivizing charitable giving.
• Affordable Care Act: The reconciliation bill fails to extend enhanced premium tax credits for Affordable Care Act (ACA) marketplace coverage. Without action from Congress, the tax credits are on track to expire by the end of 2025. This would cause health coverage costs to skyrocket for millions of Americans, or for coverage to be lost altogether in 2026. The legislation would also take premium tax credits and Medicare away entirely from many immigrants who work and live in the U.S. lawfully.
• Immigration: The reconciliation bill would limit certain immigrants’ access to Medicaid and Medicare, the Child Tax Credit, and federal financial aid, among other benefits. These actions are an attempt to curb immigrant families’ use of social safety net programs. However, immigration experts and advocates say the changes would largely be felt by children who are U.S. citizens with parents who are undocumented, refugees, or asylees. The bill also allocates more than $150 billion for immigration enforcement, which will be used to hire 10,000 new immigration enforcement officers and build a border wall. Finally, the bill would create new or higher fees for immigration-related services, such as a $1,000 fee for asylum applications.
• Medicare: The reconciliation package would add $3.8 trillion to the federal deficit over the next 10 years. If it is enacted into law in its current form, and Congress takes no further action, the increase in the deficit would trigger mandatory cuts to Medicare under the Statutory Pay-As-You-Go Act of 2010. These cuts would total approximately $500 billion from 2026 to 2034.
• Child Tax Credit: The bill would block as many as 20 million children in working families from receiving the full $2,500 Child Tax Credit (CTC) because their parents don’t earn enough. Currently, 17 million children in low-income families receive no CTC or only a partial CTC because of the credit’s structure. These families would not receive anything from the bill’s $ 500-per-child increase, while families earning up to $400,000 would get the full increase. Further, it would also strip 4.5 million children who are U.S. citizens of eligibility for the credit if even one of their parents lacks a Social Security number.
• Student Loans: The reconciliation package reduces federal education-related spending by more than $300 billion. It would make significant changes to federal student loan repayment and forgiveness programs, including eliminating Public Service Loan Forgiveness eligibility for medical and dental residents; repealing the Income-Contingent Repayment plan, Pay-As-You-Earn plan, and Saving on a Valuable Education plan; creating a new income-driven repayment plan called the Repayment Assistance plan; and eliminating the Extended and Graduated repayment plans for new student loan borrowers. Under the bill, subsidized loans for undergraduates would no longer be allowed after July 1, 2026. Additionally, many college students would lose access to the Pell Grant, as the bill would increase the full-time enrollment requirement from 24 to 30 semester hours each academic year.

Other provisions of note include:

• An elimination of clean energy tax credits approved in the 2022 Inflation Reduction Act. It phases out tax credits for rooftop solar installations, eliminates electric vehicle tax credits after 2025, and cuts off clean energy projects that don’t start construction within 60 days of the bill’s passage.
• An elimination of the remaining $267 million in Inflation Reduction Act funding for the National Park Service.
• A 10-year moratorium that bans states and localities from regulating artificial intelligence;
• A policy that would restrict federal courts’ authority to hold government officials in contempt if they violate judicial orders.

It is important to remember that this bill is just one step in the reconciliation process. The legislation is now in the Senate, where several changes are expected to be made, giving all of us an opportunity to urge senators to remove the harmful provisions listed above.

Here are two ways you can help:

• Sign this national sign-on letter: Urge Congress to remove harmful provisions in the tax bill targeting nonprofit organizations. This coalition is led by the National Council of Nonprofits, the Council on Foundations, Independent Sector, and United Philanthropy Forum.
• Contact Our Senators: Urge Senator Husted and Senator Moreno to protect nonprofits and their ability to serve their communities.

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