Washington, D.C.– Congressman Erik Paulsen (MN-03) has introduced legislation that would encourage charitable giving by providing tax incentives and reducing barriers for individuals donating to charity. The bill, the Interest for Others Act, excludes from taxable income interest earned from checking and savings account and dividends received from a money market mutual fund if the money is donated to a qualified charitable organization. The average amount of annual interest or dividends earned on an account is relatively small. However, with millions of accounts nationwide, the potential increase in charitable giving could be significant as Americans take advantage of the bill’s provisions.

“Minnesotans have long been known to be generous when it comes to giving to charity and helping others,” said Paulsen. “This bill is based on the simple premise that by making it easier for the millions of people with savings and money market accounts to donate money to charitable organizations, more people will be helped.”    

In addition to the tax benefit for savings and money market account owners, the legislation reduces the paperwork burden for banks and credit unions by eliminating the requirement that financial institutions issue a 1099 form for any account where the interest or dividends are donated to charity. The bill also includes important provisions to protect against fraud and abuse. For instance, an individual may only exclude up to $50 in interest or dividends on an account each year.

The idea for the legislation was brought to Congressman Paulsen by a Minnesota constituent and the Interest for Others Foundation. The foundation works with financial institutions and their customers to encourage charitable donations from their savings and money market accounts.  

Paulsen, a champion of small business and advocate of free enterprise, entrepreneurship, and innovation, serves on the House Ways and Means Committee, the bicameral Joint Economic Committee, and is co-chair of the Congressional Medical Technology Caucus.

For more information on Congressman Paulsen’s work in Congress visit Paulsen.house.gov.

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