Regulatory and Industry News Alerts from Armanino

Donate to Universities? What to Know About the Public University Research Infrastructure Credit

by Katy Brown, Matt Petroski
October 07, 2021

The House Ways and Means Committee recently released proposed tax changes for the budget reconciliation bill known as the Build Back Better Act. The proposal includes the addition of the Public University Research Infrastructure Credit, which would provide a 40% general business credit for qualified cash contributions made by taxpayers to a certified education institution in connection with a qualifying research infrastructure program. Taxpayers may elect to claim this credit with respect to a qualifying cash contribution in lieu of treating the contribution as a charitable deduction.

The proposed legislation would provide $500 million in credits for each calendar year from 2022 thru 2026 for contributions to eligible institutions on a project basis.


The potential to create a credit for a contribution that normally is a deduction can be a significant tax benefit to taxpayers. The apparent intent is to spur an influx of funding to small/medium state universities that generally lack the resources of large research universities. If passed into law, the credit won’t be available until 2022, and Treasury regulations will likely be issued to provide additional guidance. But taxpayers can start planning by identifying eligible institutions.

Key elements

Qualifying project – A project to purchase, construct or improve research infrastructure property.

Research infrastructure property – A portion of a property, building or structure of an eligible educational institution or any land associated with such property that is used for research.

An eligible institution includes:

  • An institution of higher education that is a state college or university described in section 511(a)(2)(B) which is an agency or instrumentality of any government or political subdivision.
  • An organization that provides support for a state college or university described in 170(b)(1)(A)(iv) or section 509(a)(3), which has been delegated authority for applying for or administering credit amounts on behalf of the institution, which is an organization that receives a substantial part of its support from the United States or any state or political subdivision.

A certified institution is an eligible institution which has been allocated a credit amount by the Secretary of Treasury for a qualifying project.

The aggregate amount of cash contribution a certified educational institution may designate as a qualified cash contribution cannot exceed 250% of the credit amount allocated to the institution for a qualifying project.

The credits will be awarded based on the extent of expansion of the institution’s targeted research in science, mathematics, engineering and technology and will take into consideration eligible educational institutions with full-time student populations of less than 12,000.

In the event of noncompliance, contributions made to an institution of higher education under this section will be treated as unrelated business income and subject to tax.

If you have questions or would like to discuss how the proposed changes may impact you, contact Armanino’s tax experts.

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