North Carolina Center for Nonprofits Nonprofit Policy Update newsletter

December 2, 2022

In this issue...

Coming in early 2023: Nonprofit Policy Conversations

Learn more about possible new health care options for nonprofit employees’ families

Congress could consider some nonprofit priorities this month

U.S. Supreme Court plans to rule on student debt cancellation program in 2023

Let us know: What policy issues are important for your nonprofit?

Coming in Early 2023: Nonprofit Policy Conversations

Starting next month, the Center will host a series of Nonprofit Nonprofit Policy ConversationsConversations around the state to bring together nonprofit leaders and local elected officials (mostly state legislators) to discuss public policy issues that are important to charitable nonprofits and the people and communities they serve. At each of these Nonprofit Policy Conversations, the Center will provide a briefing on trends in the nonprofit sector and potential public policy solutions and challenges for nonprofits in 2023 and beyond. The Nonprofit Policy Conversations will also include discussions about state and federal public policy issues of particular interest to local nonprofits. The Center is working with local partners to host these events in Asheville (January 10), Wilmington (February 10), Burlington (date TBD), Charlotte (date TBD), Concord (date TBD), the Triangle (date TBD), and Winston-Salem (date TBD). Registration is open for the Asheville and Wilmington events; we’ll keep you posted as the rest of the dates are finalized.

Learn More about Possible New Health Care Options for Nonprofit Employees’ Families

Last month, the Internal Revenue Service issued a final regulation that could lower health care costs for the families of many nonprofit employees by addressing a quirk in the Affordable Care Act (ACA) health insurance marketplace known as the “family glitch.” Essentially, the new regulation means that many nonprofit employees will be able to purchase subsidized health insurance on the ACA marketplace for their spouses and dependents starting in January 2023. See the last paragraph of this item for a slightly longer legal explanation of the new regulation.


To help your employees better understand whether they might be able to get higher quality and less expensive health insurance for their spouses and dependents, Marsh McLennan Agency, a partner of the Center, has prepared a summary of the new IRS fix to the “family glitch”, including several sample affordability calculations. The Center and Marsh McLennan Agency are also offering a free webinar on the “family glitch” next Wednesday, December 7 at 1 p.m. (registration is required to join). And to learn more about the many health care options available to small and midsized nonprofits, check out the Center’s recently-updated information page on nonprofits and health insurance.


As promised above, here is the slightly longer legal explanation: Under a 2013 Internal Revenue Service regulation, employees and their spouses and dependents were ineligible for ACA marketplace premium subsidies if the employee had access to “affordable” health insurance through their employer, regardless of whether other family members had access to “affordable” health coverage (with “affordable” defined through a calculation in the regulation). The new rule, which takes effect on January 1, 2023, changes the “affordability calculation to cover the entire family’s health care costs. Starting in 2023, nonprofit employees’ families and dependents will be eligible for ACA marketplace premium subsidies – which may be significantly less expensive and offer more plan options than nonprofit group health plans – if health coverage for the entire family under the lowest-cost employer provided health plan costs more than 9.12% of household income.

Congress Could Consider Some Nonprofit Priorities This Month

With Republicans winning a narrow majority in the U.S. House of Representatives and Democrats maintaining their slim majority in the U.S. Senate, Congress will have divided leadership next year, making it more challenging for federal lawmakers to pass legislation. That means that congressional Democrats have greater incentive to pass laws this month. Over the next three week (or perhaps a bit longer), Congress will likely consider several major bills, including appropriations legislation and tax law changes. Congress could include several provisions of importance to nonprofits in its appropriation and tax legislation this month, including:

  • Appropriations. The federal government is currently funded through a temporary appropriations bill that expires on December 16. Congress will likely try to pass legislation to fund the federal government through September 30, 2023. An appropriations bill could be a vehicle for additional spending in a variety of federal programs of importance to nonprofits ranging from child care to affordable housing to health care to the arts. Members of Congress could also include earmarks to a variety of nonprofits in a spending bill. If members of Congress can’t finalize appropriations legislation in the next two weeks, they could pass another short-term continuing budget resolution to extend their deadline for funding the federal government later into December.
  • Incentives for Charitable Giving. Last month, more than 550 nonprofits, including the Center and 17 other North Carolina organizations, sent a letter to congressional leaders urging them to renew the universal charitable deduction, a temporary tax incentive for charitable giving that expired at the end of 2021. The letter also encourages Congress to increase the cap on charitable deductions for non-itemizers from $300 for individuals and $600 for married couples (the 2001 levels for the universal charitable deduction) to about $4,000 for individuals and $8,000 for married couples to encourage taxpayers to give more generously to support their communities. A recent Fundraising Effectiveness Project reportEffectiveness Project report highlights the critical importance of Congress passing new tax incentives for charitable giving. The report found that the number of donors to nonprofits in the first half of 2022 dropped by 7% from the same period in 2021 and that overall growth in the dollar amount of donations to nonprofits hasn’t kept up with inflation this year.
  • Child Tax Credit. Last year, child poverty dropped to record lows, in large part because the American Rescue Plan Act (ARPA) expanded and improved the child tax credit in three important ways in 2021:
  • It increased the amount of the tax credit from $2,000 per child to $3,600 for children under the age of six and $3,000 for children ages 6-17.
  • It made the credit fully refundable, providing financial assistance to many low-income families who don’t normally pay income taxes.
  • It provided advance payments of the credit for the final six months of 2021, providing immediate cash assistance to millions of families in the form of monthly checks.

The expanded and prepaid child tax credit complemented the work of many nonprofits by helping families pay for child care, food, home and car repairs, and medical expenses last year. Congress allowed these improvements to the child tax credit to expire at the end of last year, and many nonprofits are urging Congress to restore these improvements in tax legislation this month. To help your nonprofit take action, the NC Budget and Tax Center has made it easy to contact your U.S. Representative and our two U.S. Senators to urge them to reinstate and make permanent the improvements to the child tax credit in year-end legislation.

  • Employee Retention Tax Credit. During the first three quarters of 2021, many nonprofits benefitted from the Employee Retention Tax Credit (ERTC), which provided economic relief to organizations that suffered financial losses during the COVID-19 pandemic. Congress abruptly ended the ERTC on September 30, 2021, and many nonprofits are advocating for congressional leaders to retroactively restore it for the fourth quarter of 2021 and for 2022 as part of tax legislation this month.


The Center will let you know when there are opportunities for your nonprofit to take action on any of these issues in the coming weeks.

U.S. Supreme Court Plans to Rule on Student Debt Cancellation Program in 2023

Yesterday, the U.S. Supreme Court agreed to hear a case challenging the new federal government program that would cancel up to $10,000 of federal student loan debt for millions of Americans. The Court will hear arguments in February and could issue an opinion on whether the program can move forward sometime in 2023. In light of the pending litigation, the U.S. Department of Education has stopped accepting applications for the program while the case makes its way through federal appeals courts. As of last month, the Department had approved more than 16 million applications for debt cancellation. The court ruling on the debt cancellation program does not affect the Public Service Loan Forgiveness (PSLF) program that provides debt relief for borrowers who work for 501(c)(3) nonprofits for 10 years while paying off their student debt. 


To help your nonprofit and your staff better understand the many recent changes to student loan forgiveness programs , the National Council of Nonprofits has posted an article on the student loan rollercoaster and how it affects nonprofit workers.

Let Us Know: What Policy Issues Are Important for Your Nonprofit?

As a regular reader of our Nonprofit Policy Update, you are likely aware that the Center advocates on a wide range of state and federal public policy issues that affect all or most 501(c)(3) nonprofits operating in North Carolina. Many of the issues on the Center’s 2022 public policy agenda are included because of the input from your organization and other nonprofits around the state. The Center is in the process of developing its policy agenda for 2023. Let us know if there are any nonprofit sector issues that are important for your organization that we should consider adding to (or keeping in) our policy agenda for 2023. 

The Center provides Nonprofit Policy Update each week as a benefit to its nonprofit members. However, to help all North Carolina nonprofits respond to the COVID-19 pandemic, we're temporarily providing this newsletter to non-member nonprofits. Become a member to ensure you continue receiving these updates along with many other valuable benefits.

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Nonprofit Policy Update is the weekly newsletter of state and federal policy issues that affect all 501(c)(3) nonprofits for current members of the North Carolina Center for Nonprofits. Learn about the Center's public policy priorities or contact David Heinen, Vice President for Public Policy and Advocacy, for more information.


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