Bipartisan Congress Members Push for Universal Charitable Deduction: Three Things to Know About the Charitable Act

Sen. James Lankford (R-OK) introduced S.566 – Charitable Act (“the Act”) in February 2023. Rep. Blake D. Moore (R-UT-1) introduced the House companion bill, H.R. 3435, in May 2023. Although the Act is a popular bipartisan bill, they have gained no traction in Congress to date. The Act addresses the “universal” charitable donation deduction in an expanded format.

Sen. James Lankford (R-OK) introduced S.566 – Charitable Act (“the Act”) in February 2023. Rep. Blake D. Moore (R-UT-1) introduced the House companion bill, H.R. 3435, in May 2023. Although the Act is a popular bipartisan bill, they have gained no traction in Congress to date. The Act addresses the “universal” charitable donation deduction in an expanded format.

Under the previous version of the universal charitable deduction, all taxpayers could deduct up to $300 in charitable donations on their federal income tax returns. This deduction expired at the end of 2021. The deduction originated as part of the CARES Act COVID-era relief package in 2020, and Congress renewed the deduction for 2021, even increasing the deduction to $600 for married couples. Bipartisan efforts to renew the universal charitable deduction have failed thus far, and the deduction has not been renewed to date.

Here are three things that you should know about the Charitable Act.

1. Without the Charitable Act, only taxpayers who itemize deductions can claim a deduction for charitable donations. In 2017, federal legislation greatly increased the standard deduction and decreased the number and amount of available itemized deductions. These changes resulted in more people using the standard deduction instead of itemizing deductions on their tax returns. The lack of a tax incentive has led to fewer charitable donations.

2. The Charitable Act would increase individual charitable donations. As the amount of the universal charitable donation deduction previously was so low, many people were willing to donate small gifts up to the amount of the deduction than ever before. The deduction encouraged and increased individual charitable giving and presumably would do so again.

3. Under the Charitable Act, non-itemizing taxpayers could deduct up to 1/3 of the standard deduction for charitable donations. The charitable

deduction could be worth about $4,500 for a single taxpayer and, for a married couple filing jointly, about $9,000.

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