The Introduction of the Charitable Act
The Charitable Act was introduced by Senators James Lankford and Chris Coons on February 28.
The Charitable Act is nearly identical to the bipartisan bill introduced in the previous Congress, S. 618, with minor technical changes including a new title and updated extension for taxable years 2023 and 2024.
Many people who give to nonprofits do not see the same benefits as the wealthy, who can write off donations on their taxes. This new bipartisan bill, the Charitable Act, aims to change that by permitting more Americans to write off their charitable donations on their taxes.
Proposed write-off amounts in the Charitable Act
In previous years, non-itemizers could deduct up to $300 in cash donations, while married couples could deduct up to $600 in 2021. However, these deductions have since expired, a news article reported. The Charitable Act would allow those who take the standard deduction on their taxes, which is the vast majority of households, to also deduct their donations to charities, religious groups, and other nonprofit organizations.
The proposed write-off amounts in the Charitable Act are far more generous than previous deductions. According to Minnesota Council on Foundations, the bill seeks to restore the non-itemizer charitable deduction, increasing the caps from $300 to about $4,600 for individuals and $9,200 for joint filers. This means the size of the write-off would increase over time as the standard deduction increases.
The Charitable Act would benefit not only the donors but also the nonprofit organizations they support. By allowing more Americans to write off their donations, the bill could encourage more people to give to nonprofits, which could lead to more funding for important causes.
This bill has bipartisan support, with sponsors including Sen. James Lankford, a Republican from Oklahoma, and Sen. Chris Coons, a Democrat from Delaware. It remains to be seen if the bill will pass, but it is a promising step toward making charitable giving more accessible and inclusive for all Americans, not just the wealthy.