Bipartisan legislation that would allow Americans to raise the amount of money they can deduct from their federal taxes for charitable donations is supported by more than 25,000 organizations.
The Charitable Act would enable taxpayers to claim an additional tax deduction of up to one-third of the standard deduction for non-itemizers even if they choose not to itemize their deductions the base-rate tax deduction is available to taxpayers who do not itemize their deductions.
CARES Act
In 2023, this would equate to a deduction of up to $4,500 for single filers and $9,000 for married couples filing jointly. The CARES Act, a COVID-19 response law introduced in 2020, included a similar clause, but it has since expired.
Sponsors of the Charity Act are Senators. Tim Scott (R-SC), Gary Peters (D-MI), Amy Klobuchar (D-MN), Gary Peters (D-OK), James Lankford (R-OK), Catherine Cortez Masto (D-NV), Marco Rubio (R-FL), Maggie Hassan (D-NH), Raphael Warnock (R-GA), Susan Collins (R-ME), Amy Klobuchar (D-MN), James Lankford (R-OK), and Jeanne Shahe (D-NH).
“Proud to have worked on the Charity Act that will broaden and extend the deductions Citizens can claim to encourage even more Americans to embrace the civic virtue of charitable giving,” Coons stated.
The Jewish Federations of North America is among the philanthropic groups that support the measure.
Standard Tax Deductions For 2023
The IRS estimates that the standard deductions for individuals for the 2023 tax year will be $13,850 and $27,700 for married couples filing jointly.
The law has the support of both the National Council of Nonprofits, which has more than 25,000 member groups and the Charitable Giving Coalition, which has 175 member organizations.
Moreover, the YMCA, Salvation Army, and United Way International are leading proponents of the law.
The bill has the support of numerous organizations, including the Jewish Federations of North America, Independent Sector, Philanthropy Southwest, The Association of Fundraising Professionals, United Philanthropy Forum, The National Philanthropic Trust, Nonprofit Alliance, Council for Advancement and Support of Education, Faith & Giving, and more.
The Coronavirus Assistance, Relief, and Economic Security (CARES) Act of March 2020 was passed by Congress and established a $300 federal non-itemized tax deduction for charitable contributions.
The Taxpayer Certainty and Disaster Tax Relief Act of 2020 contained a yearlong extension into 2021 when the CARES Act provision expired in December 2020.
The Taxpayer Certainty and Disaster Tax Relief Act clause, according to a GOP aide, also shifted the deduction below the line so as not to affect the taxpayer’s adjusted gross income.
The measure that Lankford is proposing would increase it to a third of the standard deduction while still keeping it below the line.
Read more: IRS: Is volunteer work tax deductible? What are the permitted tax deductions?
