What This Bill Does
This bill would amend the Internal Revenue Code to exempt qualified religious institutions from the federal excise tax on investment income. In practical terms, it would relieve eligible churches and similar faith-based institutions from a tax tied to the earnings on their investments and endowments. The main beneficiaries would be religious organizations that hold financial assets, while the federal government would forgo some tax revenue. The proposal is in the House and has been referred to the Committee on Ways and Means for tax review.
- Exempts qualified religious institutions from the excise tax on investment income.
- Applies through an amendment to the Internal Revenue Code of 1986.
- Would reduce federal tax collections from covered faith-based organizations.
- Targets institutions that earn income from investments or endowments.
Who This Bill Affects
If you are part of a church, synagogue, mosque, or similar qualifying religious institution that earns investment income, this bill could lower your organization’s federal tax bill and leave more money for religious, charitable, or community programs. If you are a donor or member, the practical effect could be that more of the institution’s investment earnings stay in its budget instead of going to the IRS. For most other taxpayers, the change would not alter your own filing obligations directly, though it could modestly reduce federal revenue.
See how this bill affects you — sign in for a personalized analysisWho Supports & Opposes This
- Faith-based institutions Religious organizations would keep more of their investment earnings, which can be redirected toward worship, staffing, upkeep, and charitable work. Supporters see the tax as an added burden on mission-driven institutions that already serve the public in many ways.
- Donors and congregants People who support churches and other houses of worship may prefer that investment income stay in the institution rather than being reduced by federal tax. They may argue this helps local communities and preserves resources for ministry and service.
- Charitable-service providers Religious groups often finance food assistance, counseling, shelters, and community outreach from investment returns. Supporters can argue that exempting that income strengthens services that might otherwise have to be scaled back.
- Tax fairness advocates Opponents may argue that a special exemption for one category of nonprofit creates unequal treatment across organizations that also serve the public. They may prefer a consistent tax rule for investment income regardless of religious affiliation.
- Federal budget watchers Removing this tax would reduce federal revenue, even if the amount is limited to a narrower set of institutions. Critics may say Congress should avoid carving out new exemptions unless there is a strong public-purpose justification.
- Some nonprofit competitors Other tax-exempt or charitable organizations may object if religious institutions receive a unique break that is not available to similarly situated groups. They could view that as an uneven advantage in fundraising and asset management.
Key Implications
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““exempt qualified religious institutions””
This means the bill would create a special federal tax exception for eligible faith-based entities, rather than applying the investment-income tax to them in the usual way.
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““the excise tax on investment income””
The bill targets the tax that is triggered by earnings on investments, not donations or ordinary operating revenue. Institutions with endowments, reserves, or other invested assets would be the ones most directly affected.
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““To amend the Internal Revenue Code of 1986””
The change would be made through the federal tax code, so the effect would come through a statutory tax rule rather than a grant program or administrative waiver.
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““qualified religious institutions””
Only institutions that meet the legal definition would benefit, which makes eligibility standards important. Real-world impact would depend on how broadly or narrowly those institutions are defined in tax law.
Latest Status
June 18, 2026
Referred to the House Committee on Ways and Means.
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Ask AI about this billData sourced from api.congress.gov.