A bipartisan coalition of senators hopes to include a significant expansion of the tax break for charitable giving in additional coronavirus economic relief legislation.
The senators support a permanent universal charitable contribution deduction for non-itemizers that would be notably larger than the $300 above-the-line temporary deduction enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136). Another coronavirus economic recovery package is a possible vehicle.
“If there is another bill that comes up in the days ahead . . . to respond to COVID-19, we hope to be able to expand” the universal charitable deduction, said Senate Finance Committee member James Lankford, R-Okla., who joined the other senators for a June 2 webinar presented by the National Council of Nonprofits and other charitable sector organizations.
“This group [of senators] worked very hard to be able to get a $300 deduction above the line . . . so everyone could take advantage of that during this time period, and we could encourage people to be more engaged,” explained Lankford, who offered an amendment to raise the $300 limit during CARES Act deliberations in March. “We’re continuing to be able to work toward increasing that.”
Sen. Christopher A. Coons, D-Del., said that “$300 . . . is far better than nothing, but it doesn’t reflect the magnitude of goodwill that I’m seeing in my state or hearing about all over the country.”
Expanding the universal deduction to one-third of the standard deduction for tax years 2019 and 2020 is “the logical next step,” said Sen. Mike Lee, R-Utah.
The senators said an increased deduction is critical to helping charities serve communities during hardships caused by the coronavirus, the resulting economic downturn, and recent protests in America’s cities.
“We need to make sure that we do everything possible to continue to support nonprofits, and that’s why moving that charitable contribution [deduction] above the line so that we can encourage people to make those contributions is so important,” said Sen. Jeanne Shaheen, D-N.H.
Big Solutions
Coons expressed confidence that Democrats and Republicans can work together to pass an expanded deduction. He noted that the December 2019 repeal of a tax on transportation benefits provided by nonprofit employers to their employees had bipartisan support and that the CARES Act passed the Senate unanimously.
“In the face of the scale of the kind of crisis we have right now, we demonstrated recently the ability to work across the aisle and to embrace big solutions and to get things done,” Coons said.
Sen. Amy Klobuchar, D-Minn., also participated in the program. Finance Committee member Tim Scott, R-S.C., had been scheduled to speak but didn’t appear.
In recent months, other lawmakers have proposed expanding the charitable deduction. The Save Organizations That Serve America Act (H.R. 6408), introduced March 27 by Reps. Seth Moulton, D-Mass., and Brian K. Fitzpatrick, R-Pa., would establish a permanent universal charitable deduction.
The Coronavirus Help and Response Initiative Through Year 2022 Act (H.R. 6490), introduced April 8 by Rep. Mark Walker, R-N.C., would establish a universal charitable deduction, effective through the end of fiscal 2022, that would amount to about $4,000 for individual filers and $8,000 for couples filing jointly.