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Section 501(h) Lobbying Limit CalculatorNontaxable and Grassroots Amounts

What does this come to under the current IRS rules?

Lobbying nontaxable amount from exempt purpose expenditures, the grassroots limit, any excess lobbying expenditures and the 25 percent tax.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Lobbying nontaxable amount
$260,000
Grassroots nontaxable amount
$65,000
Total lobbying room remaining
$20,000
Drawn to one scale
Lobbying nontaxable amount$260,000
Grassroots nontaxable amount$65,000
Total lobbying room remaining$20,000
Grassroots room remaining-$5,000
Excess lobbying expenditures$5,000
Section 4911 tax at 25 percent$1,250
All results
MeasureResult
Lobbying nontaxable amount$260,000
Grassroots nontaxable amount$65,000
Total lobbying room remaining$20,000
Grassroots room remaining-$5,000
Excess lobbying expenditures$5,000
Section 4911 tax at 25 percent$1,250
How this was worked out
Work shownrecomputed as you type
Nontaxable amount: 20% of the first $500,000 of exempt purpose expenditures; $100,000 + 15% of the next $500,000; $175,000 + 10% of the next $500,000; $225,000 + 5% of the rest; never more than $1,000,000
Grassroots nontaxable amount = 25% of the lobbying nontaxable amount
Excess = greater of (lobbying - nontaxable) and (grassroots - grassroots nontaxable); tax = 25% of excess

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Nontaxable amount: 20% of the first $500,000 of exempt purpose expenditures; $100,000 + 15% of the next $500,000; $175,000 + 10% of the next $500,000; $225,000 + 5% of the rest; never more than $1,000,000
  • Grassroots nontaxable amount = 25% of the lobbying nontaxable amount
  • Excess = greater of (lobbying - nontaxable) and (grassroots - grassroots nontaxable); tax = 25% of excess

How it works

A public charity that elects under section 501(h) measures its lobbying against a sliding scale of its exempt purpose expenditures in section 4911(c). Grassroots lobbying, which tries to influence legislation by affecting the opinions of the general public, has its own cap of one quarter of the overall amount.

If either limit is exceeded in a year, section 4911(a) imposes a 25 percent tax on the larger excess. The tool covers the annual test only; it does not apply the separate multi-year averaging that decides whether an electing organization keeps its exemption.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Does grassroots lobbying count toward the overall limit too?

Yes. Grassroots expenditures are part of total lobbying expenditures and are also tested against their own 25 percent cap.

What is the most an electing charity can spend tax-free?

The lobbying nontaxable amount never exceeds $1,000,000, reached at $17,000,000 of exempt purpose expenditures.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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