H.R. 9353: To amend the Internal Revenue Code of 1986 to exempt qualified religious institutions from the excise tax on investment income.

This bill would change a federal tax rule so that certain religious institutions would no longer have to pay the excise tax on investment income that applies under Section 4968 of the Internal Revenue Code.

What the current tax is

Under current law, some institutions can owe a tax on their investment income. This bill would add an exemption for a new category called “qualified religious institution.”

Which institutions would qualify

To be exempt, an institution would generally have to meet all of these requirements:

• It was established after July 4, 1776.
• It was established by, or is associated with, a religious organization described in the tax code.
• It meets one of several relationship tests with that religious organization, such as:
  • At least 25% of its top governing body is appointed or approved by the organization, or must be clergy from that organization;
  • It has a written agreement with the organization describing their relationship and shared mission or values; or
  • The organization formally designates it as a religious institution based on its religious identity, values, or educational mission.
• It has a published mission statement approved by its governing body that includes or is based on religious beliefs, teachings, or tenets.

When it would take effect

The change would apply to tax years beginning after December 31, 2025.

Administrative action

The Treasury Department would be required to issue regulations or other guidance by December 31, 2026 to help carry out the new rules.

Relevant Companies

None found