Bipartisan Bill Would Make It Easier to Deduct Charitable Donations

The Charitable Giving Tax Deduction Act was introduced May 11.

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WASHINGTON — A bipartisan bill introduced in Congress last week would make it easier for Americans to receive tax deductions for charitable giving, regardless of whether they itemize on their tax returns.

“Charitable organizations, including churches, synagogues and other religiously based entities, are the lifeblood of services to those in need in our society, and I am committed to a tax policy that amplifies their ability to serve our community,” said U.S. Rep. Chris Smith, R-N.J., who authored the bill, in a press release.

“Americans have been generous patrons of charitable causes, and we want to ensure that everyone has the support they need to continue their generosity to charitable and philanthropic causes.”

The Charitable Giving Tax Deduction Act was introduced by Smith May 11, with U.S. Rep. Henry Cuellar, D-Texas, as an original co-sponsor.

“It is always important to give back to the community,” said Cuellar in a press release. “This bipartisan bill not only encourages us to help our fellow neighbors, but it also makes sure that taxpayers can receive their due deduction for charitable giving if they choose not to itemize.”

The bill would make charitable deductions “above-the-line,” meaning adjusted gross income would be reduced. This would allow taxpayers to write off charitable deductions regardless of whether households decide to itemize. Under the legislation, charitable contributions would not be capped.

More than a dozen religious and charitable organizations have voiced support for the bill, including the Union of United Orthodox Jewish Congregations of America, the New Jersey Catholic Conference, the Council on Foundations, the Faith & Giving Coalition, and the New Jersey YMCA State Alliance.

Vikki Spruill, president and CEO of the Council on Foundations, said the bill would help correct flaws in the Tax Cut and Jobs Act of 2017. That legislation significantly increased the standard deduction, meaning that fewer taxpayers will itemize.

The proposed legislation would restore the tax incentive to donate, particularly for lower-income households, Spruill said.

“At its core, our nation’s charitable-giving policies should encourage and enable those small and medium-sized donors who serve as a powerful engine in the sector’s ability to assist communities. This legislation brings those givers back into the fold by expanding the charitable deduction to millions more,” she said.

The New Jersey Catholic Conference also praised the legislation for promoting and protecting the revenue resources that help charities to function, particularly after last year’s tax-code revision “makes charitable giving increasingly more difficult.”

“Every year, New Jersey Catholic Charities agencies assist hundreds of thousands of individuals and families to meet their most basic needs. Their ability to provide quality services depends upon charitable donations,” the conference said. 

“The tax code should help, not hurt, nonprofit organizations tasked with serving the most vulnerable in our society. Congressman Smith’s bill would protect those revenues sources that are vital to the assistance of so many in need.”