Sponsor
Lisa Murkowski
Senator · R-AK
Senator · R-AK
The bill increases direct support for food security by making micro‑grants tax‑free for recipients, improving their ability to provide assistance, at the cost of a small reduction in federal revenue and some potential short‑term compliance confusion.
Food banks, pantries, tribal organizations, eligible low-income individuals, and certain local governments will not owe federal income tax on micro‑grants under 7 U.S.C. § 7518, so recipients keep the full grant amount and can expand or sustain food assistance and related operations.
Recipients and tax preparers will face clearer tax treatment for these micro‑grants, reducing administrative burden and uncertainty about reporting this assistance as taxable income.
Excluding these micro‑grants from taxable income reduces federal tax receipts slightly, which modestly increases pressure on the deficit or could marginally reduce funding available for other federal programs.
Some recipients may misinterpret the exclusion and mistakenly fail to report other taxable assistance, creating short‑term compliance confusion and potential filing errors for low‑income individuals and nonprofits.
Based on analysis of 1 section of legislative text.
Makes USDA Micro-grants for Food Security (7 U.S.C. § 7518) tax-exempt for eligible recipients by excluding those payments from gross income.
Official title: Amend the Internal Revenue Code of 1986 to exclude micro-grants for food security from gross income.
Introduced June 15, 2026 by Lisa Murkowski · Last progress June 15, 2026
Excludes from gross income microgrants and related financial assistance received under the USDA Micro-grants for Food Security program (7 U.S.C. § 7518). The exclusion applies to the eligible entities named in that statute — including individuals, Indian tribes and tribal organizations, designated nonprofits (like food banks and food pantries), certain federally funded schools and local or Tribal governments that cannot levy local taxes — for taxable years beginning after the date of enactment. The change adds a new Internal Revenue Code provision (new section 139M) making those subgrants tax-exempt for recipients in the enumerated eligible States and territories under the underlying USDA program.