To amend the Internal Revenue Code of 1986 to exempt qualified religious institutions from the excise tax on investment income.

Key Points

• This bill would stop the government from collecting a tax on the investment earnings of certain religious colleges and universities. Right now, some large private schools must pay a tax on the money they make from their savings and investments.
• To get this tax break, a school must be closely linked to a church or religious group. The school also needs to have a public mission statement that is based on religious teachings or beliefs.
• The bill sets rules for how a school proves its religious connection. For example, a church might need to appoint 25 percent of the school's board members, or the school must have a formal agreement about its religious identity.
• This change would apply to tax years starting after 2025. The Treasury Department would be required to set the final rules for the program by the end of 2026.
• Supporters believe this will help religious schools keep more of their money to spend on students and their religious mission rather than paying federal taxes.

Impact Analysis

Govbase has not yet run an impact analysis on this legislation.