12 October 2017

Legislation Would Expand Charitable Deduction to All Americans

WASHINGTON, D.C.— Legislation has been introduced by Rep. Mark Walker (R-NC), H.R. 3988, The Universal Charitable Giving Act of 2017, which would expand the charitable deduction to Americans who opt to take a standard deduction.

“We thank Congressman Walker for listening to charities and introducing this bill. It addresses our concern that the current charitable deduction would be diminished by greatly reducing the number of Americans who itemize, which will curb giving. As a solution to this concern, the charitable sector has proposed expanding the charitable deduction to all Americans. We look forward to working with Congressman Walker, his staff and other members of Congress to build on this momentum to make this legislation as robust as possible,” said Sandra Swirski, executive director of the Alliance for Charitable Reform.

Current law only allows those who itemize their taxes to qualify for the charitable deduction. H.R. 3988 expands the charitable deduction to Americans who take the standard deduction and do not itemize. The legislation would allow non-itemizers to deduct charitable contributions up to one-third of the amount of the standard deduction. The legislation also preserves the current charitable deduction for those who itemize.

Current tax reform proposals call for doubling the standard deduction, reducing the number of itemizers from one-third of Americans to about five percent. According to IRS data, this would remove the tax incentive for an estimated $95 billion of annual charitable giving.

“Allowing all Americans to deduct their charitable giving will address the unintended consequences of doubling the standard deduction, which could reduce giving by as much as $13 billion. We thank Congressman Walker and his staff for recognizing this issue,” said Sean Parnell, vice president of public policy at The Philanthropy Roundtable.