Private Foundation Excise Tax

Last Updated January 17, 2020

Further Consolidated Appropriations Act, 2020 & Private Foundation Excise Tax

The private foundation excise tax was modified from the historical two-tiered system to a flat rate of 1.39% when H.R. 1865 (116) was passed on December 20 and took effect upon President’s signature. The legislative language can be found in Division Q, Title II, Section 206 of bill.

Due to the lack of written guidance at this point, the Council got clarification from its tax legislation experts that the reduction applies to taxable years “beginning after the date of enactment” (i.e., taxable years beginning after December 20, 2019). Thus, for a calendar-year foundation, the changes will not impact the 2019 tax year and will take effect in the 2020 tax year because such foundation’s taxable year begins January 1 of any particular year.

If a foundation’s financial year does not coincide with the calendar year, i.e., one whose tax year begins after December 20 but before January 1, it should consult its own financial advisor for how to proceed.

Questions? Contact the Council’s Government Affairs Team govt@cof.org.