With early voting well underway throughout North Carolina, today’s policy update reminds nonprofits to encourage their staff, volunteers, and the people they serve to vote in person this fall if they are able to do so. We share corrected information about a new proposed rule that could increase health care costs for some nonprofit employees and clients (which we partially misstated in last week’s policy update) and the good news that the U.S. Department of Education has dropped its appeal of the court decision protecting the ability of 501(c)(3) nonprofits to be eligible employers for the PSLF program. And we include reminders about submitting public comments on the proposed U.S. Census changes, the importance of advocating on the three state constitutional amendments on the ballot, and the need for nonprofits to share information with their clients about recent and upcoming changes to Medicaid eligibility requirements.
|
|
|
|
Election Tip of the Week: Make Plans to Vote in Person if Possible! |
With the 2026 election coming up soon, the Center will be offering some concrete (and simple) ways that your nonprofit can provide clear and accurate (and, of course, nonpartisan) information about the election to your staff, volunteers, and community in the coming weeks.
Today’s tip: Make a plan to vote in person this year if you can. While voting by mail is an option in North Carolina – as long as you have already requested your mail-in ballot, since that deadline has already passed – North Carolinians who vote by mail risk not having their votes count for two reasons: |
- New rules from the NC State Board of Elections make it easier for local election officials to reject mail ballots for a variety of reasons, including if the inner envelope is not included or not sealed; and
-
Mail-in ballots rely on the U.S. Postal Service for delivery, which can lead to problems if they do not include enough postage ($1.98 or three 82 cents Forever stamps for the 2026 election) or if the Postal Service does not delivery your ballot to your county board of elections by 7:30 p.m. on Tuesday, November 3.
|
If you are planning to use a mail-in ballot, it is important to: |
- Double-check to ensure that your ballot is not damaged and that you have included and fully sealed the inner envelope; and
-
Consider hand-delivering your ballot to your county board of elections office or an early voting site in your county during the early voting period.
|
As the Center mentioned in last week’s policy update, early voting remains the best voting option for most North Carolinians. Early voting in North Carolina opened last week and continues through Saturday, October 31. Now is a great time for nonprofits to encourage their staff, volunteers, and the people they serve to make a plan to vote early. Early voting is a great option for many North Carolinians for several reasons:
|
- During early voting, you can register to vote if you are a new voter or update your voter registration if you have changed addresses within your county. You can’t register or update your registration on Election Day.
-
You have more options for dates and locations (any early voting site in your county) to vote during early voting. On Election Day, you can only vote at your designated polling place. Even (and maybe especially) for voters who use early voting in most elections, it is important to check the hours and locations of early voting, since these have changed in many counties this year.
- If something comes up and you are unable to vote when you originally plan, there are always other times you can still cast your ballot (either on another day of early voting or on Election Day). If you get sick or a conflict arises on Election Day, you won’t have other opportunities to vote in the election.
|
|
| |
Correction: Proposed IRS Rule Would Change Eligibility Standards for ACA Premium Tax Credits
|
Many North Carolinians – including employees of many nonprofits that do not offer group health insurance – receive health care premium tax credits to help subsidize a portion of their families’ health insurance costs. These premium tax credits are an important component of the Affordable Care Act (ACA). Last week, the Internal Revenue Service published a proposed rule on the Federal Register that would make changes to eligibility standards for people receiving these credits. Notably, the proposed rule would:
|
-
Prohibit many legal U.S. residents who are not citizens from accessing premium tax credits. This portion of the proposed rule would parallel recent changes to Medicaid eligibility for non-citizens that was part of the One Big Beautiful Bill Act that was signed into law last year. This change could significantly increase health care costs for many North Carolinians, including some nonprofit employees, volunteers, and clients.
-
Prohibit people from accessing ACA premium tax credits for any months when they do not meet the new community engagement requirements for Medicaid. Under the community engagement requirements, which take effect on January 1, 2027, most Medicaid beneficiaries are required to work, volunteer, or go to school for at least 80 hours per month or earn at least $580 per month in wages, with only very limited exceptions for people who are medically frail. It is likely that many North Carolinians will lose their Medicaid coverage next year because they fail to meet or document their work, school, or volunteer hours. The proposed rule likely means that some North Carolinians face significantly higher health care costs since they will no longer be eligible for the premium tax credits if they do not meet the community engagement standards. Note: The Center misstated what this provision would do in last week’s policy update.
|
The proposed rule is open for public comments through November 30. |
|
|
|
U.S. Department of Education Drops Appeal in PSLF Eligibility Lawsuit
|
Yesterday, the U.S. Department of Education agreed to dismiss its appeal of a June court ruling that vacated the Department’s final rule on nonprofits’ eligibility to be employers in the Public Service Loan Forgiveness (PSLF) program. The trial court had vacated the rule because it found that the Department of Education exceeded its statutory authority in issuing the rule. The Department of Education’s decision to drop its appeal means that nonprofit eligibility requirements to be employers for PSLF purposes remain unchanged (translation: this is very good news!)
Under PSLF, student loan borrowers who work in public service jobs – including positions with 501(c)(3) nonprofits – for 10 years while paying off their student loans are eligible to have the remainder of their federal student loans forgiven. PSLF has enabled many young professionals to afford careers in the nonprofit sector.
The final rule would have excluded employers – potentially including some 501(c)(3) nonprofits – from being eligible employers for PSLF if they are engaged in “substantial illegal purposes.” The final regulations define “substantial illegal purposes” to include: |
-
Aiding or abetting violations of federal immigration laws;
- Supporting terrorism;
- Engaging in chemical or surgical castration or mutilation of children;
- Engaging in child trafficking;
-
Engaging in a pattern of aiding and abetting illegal discrimination in violation of federal anti-discrimination laws (which could potentially be construed broadly to cover programs and employment practices that provide preferences based on race or proxies for race); and
- Engaging in a pattern of violating certain state laws, including trespassing, disorderly conduct, public nuisance, vandalism, or obstruction of highways.
|
Under the final rule, which was scheduled to take effect July 1, the Secretary of Education would have had the authority to determine “by a preponderance of the evidence” that an otherwise eligible nonprofit has engaged in activities that have a substantial illegal purpose with only minimal due process for the nonprofit. The final rule also would have required that nonprofits certify in their application to be a PSLF-eligible employer that they do not participate in activities that have a substantial illegal purpose, which could effectively make many nonprofits ineligible employers for PSLF purposes even if they are not actually engaged in “substantial illegal purposes.”
The bottom line is that the final rule will no longer take effect, meaning that 501(c)(3) nonprofits remain eligible employers for the purposes of PSLF. The Department of Education has removed the certification line from the PSLF eligibility form. For more information about the final rule, the Center’s concerns about it, and how it could have harmed nonprofits and their employees, check out the Center’s analysis of the final rule.
|
|
|
|
Reminder: Submit Public Comments on Proposed U.S. Census Changes by November 2 |
Last month, the U.S. Census Bureau published a proposed rule on the Federal Register that would make three fundamental changes to the 2030 U.S. Census and future decennial censuses: |
-
It would change the way “usual residence” is determined from where people are living on April 1 to the place where “they have lawfully spent the greatest number of days” between January 3 and April 1, as evidenced by their tax records. This could create challenges and mistakes for many people who receive services from nonprofits, including people experiencing homelessness, people who do not file taxes, and college students.
-
It would change the criteria that are used for counting residents of states for the purpose of the apportionment of U.S. House of Representatives districts among states. Specifically, the proposed rule would exclude many non-citizens from the count in this apportionment, despite language in the U.S. Constitution that provides that the decennial census is an enumeration of “persons” living in each state rather than U.S. citizens living in each state. The Census Bureau’s explanation of the proposed rule strongly hints that the change in residence criteria would require the 2030 U.S. Census to include a question about the citizenship status of U.S. residents.
- It would prohibit the decennial census from including questions about race, ethnicity, and sexual orientation. Every decennial census since 1790 has asked about race and ethnicity of U.S. residents, but the decennial census has never sought information about sexual orientation.
|
The proposed changes to the Census could have significant impacts for North Carolina nonprofits. Among other things, these changes could: |
-
Create significant challenges in getting a complete and accurate count of communities with significant immigrant populations;
- Reduce North Carolina’s representation in Congress;
- Jeopardize significant federal funding for North Carolina by reducing the number of people counted; and
- Eliminate important demographic data that many nonprofits use in assessing how and where to provide services.
|
The proposed rule is open for public comments through November 2. The Center encourages all nonprofits to submit public comments explaining the potential impact of the proposal on their nonprofits and their communities. Two resources that can help nonprofits prepare public comments are: |
- The NC Counts toolkit on the proposed Census rule, including more details about the proposal and its impact on North Carolina and tips on submitting public comments; and
-
The National Council of Nonprofits public comments guide.
|
|
|
|
Reminder: Learn About Impact of Three Constitutional Amendments on 2026 Ballot in North Carolina |
While 501(c)(3) nonprofits are not permitted to engage in partisan political activities such as endorsing or opposing candidates for office, they can take public positions on ballot measures where voters make decisions about things like county or municipal bonds or state constitutional amendments. Ballot measure advocacy is direct lobbying, which is legal for 501(c)(3) nonprofits, as opposed to impermissible partisan political intervention.
For every North Carolinian, this fall’s ballot includes three state constitutional amendments with implications for nonprofits and the people they serve. The three amendments would: |
-
Require all voters to provide photo ID when voting;
- Cap the state income tax rate at 3.5%; and
- Limit the ability of local governments to set property tax rates in the future.
|
The Center encourages nonprofits to understand these amendments and to communicate to their staff, volunteers, and communities about their potential impacts. Two Center partners have great information and resources on the amendments: |
-
You Can Vote has a one-page educational fact sheet about the three amendments that translates the ballot language into plain English, clearly explaining what the amendments would mean for various North Carolinians (and for the nonprofits that serve them).
-
The NC Budget & Tax Center has several excellent resources explaining the potential (negative) impacts that the tax amendments could have on North Carolina communities.
|
|
|
|
DHHS Provides Toolkit on Upcoming Medicaid Changes
|
Many nonprofits provide services to people who receive their healthcare through Medicaid. The One Big Beautiful Bill Act that Congress passed last year made several significant changes to Medicaid that create additional compliance burdens for Medicaid recipients and that limit Medicaid eligibility. The NC General Assembly passed legislation earlier this year to conform with these new federal requirements and to add additional compliance requirements for Medicaid recipients. Among other things, these new federal and state rules will mean that:
|
- Many non-citizens lost Medicaid coverage on October 1;
- Most Medicaid recipients will need to meet new work or community engagement requirements starting on January 1, 2027; and
- Starting in 2027, most Medicaid recipients will need to renew their eligibility every six months instead of once a year.
|
The NC Department of Health and Human Services (DHHS) has created a toolkit with print, video, and social media materials in both English and Spanish to explain these changes. The Center encourages nonprofits to share these materials with their communities and the people they serve to help prevent North Carolinians from losing Medicaid coverage because of non-compliance with these tricky new requirements.
|
|
|
|
|
