A bipartisan group of senators wants to encourage more gifts to charities during the pandemic by building on the temporary above-the-line deduction provided in recent coronavirus relief legislation.
The Universal Giving Pandemic Response Act, introduced June 22, would establish an above-the-line charitable contribution deduction for tax years 2019 and 2020 valued at up to one-third of the standard deduction, or about $4,000 for individual filers and $8,000 for married joint filers.
The proposal goes further than the $300 above-the-line temporary deduction enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136). The $300 deduction is insufficient to address the drop in charitable giving resulting from the economic downturn caused by the pandemic, according to nonprofit sector representatives.
“This proposal incentivizes additional giving during a time of crisis in our nation,” explained the lead sponsor, Senate Finance Committee member James Lankford, R-Okla. “I am proud of the incredible work our bipartisan group of senators has done to help ease the federal tax burden for those who give to charities,” he said in a joint release with cosponsors.
Sen. Christopher A. Coons, D-Del., added that he is proud to support the bill, which he said would “substantially increase the 2020 emergency charitable giving incentive, to adequately reflect the magnitude of goodwill that so many are showing, and many others are capable of as we work to overcome these crises together.”
The legislation immediately caught the attention of nonprofit policy advocates, with Sandra Swirski of the Alliance for Charitable Reform saying it “will encourage Americans to give more money away, putting it into the hands of organizations that are delivering critical services during the current crises.” She added in a statement that her group looks forward to working with lawmakers “to advance this bill in the next relief package and extend its availability in future years.”
Lankford and Coons first introduced the bill in 2017 and tried to include it as an amendment to the CARES Act.
In the House, the Save Organizations That Serve America Act (H.R. 6408), introduced 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 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.