The doubling of the standard federal tax deduction in 2018, a policy designed to simplify tax return filing, has had the unintended consequence of leading to a permanent reduction in charitable giving by American households who no longer itemize their deductions. It is estimated this change results in over $50 billion less in charitable giving each year. Restoring and expanding the charitable deduction for nonitemizers through an above-the-line or “universal” charitable deduction is a proven solution to incentivize new donors and donations.
Congress should pass the bipartisan “Charitable Act” which would enable all taxpayers to deduct charitable contributions. The resulting increase in support for the charitable sector will enable organizations such as Jewish Federations to continue to help the most vulnerable among us.
In 2020 and 2021 Congress enacted a modest and temporary charitable deduction to help spur giving during the COVID-19 pandemic. This temporary incentive helped increase giving, especially through a significant increase in small gifts. According to IRS statistics, 42 million taxpayers used the universal deduction and gave $11 billion to charity.
The bipartisan Charitable Act (H.R. 801/ S. 317) would restore a charitable deduction for all American taxpayers.
The bill would allow non-itemizing taxpayers to deduct charitable gifts up to one third of the current standard deduction each year. Building on the success of the temporary charitable deduction, it would incentivize more Americans to give more to charities of all types and sizes, ensuring that the charitable contribution deduction remains a bedrock democratic principle in the tax code.
Please reach out to your representative TODAY and urge them to support and pass the Charitable Act.
Please fill out this Action Alert to let your representative know that support for this bill will incentivize more Americans to support charities such as Federations and their affiliated agencies so they can continue to help the most vulnerable among us.