Universal Charitable Giving Deduction Legislation Re-Introduced in Congress

Updated February 27, 2019

Congressman Chris Smith (NJ-4) has re-introduced legislation that would provide for a complete “above-the-line” charitable deduction which would provide all taxpayers with a tax incentive for charitable giving, regardless of whether they itemize on their tax returns. H.R. 651, the bipartisan Charitable Giving Tax Deduction Act, is cosponsored by Rep. Henry Cuellar (TX-28).

Among many concerns for charities in the December 2017 federal tax law is its impact on charitable giving. Although the charitable giving deduction itself technically did not change in the new law, it remains available only for households that itemize on their tax returns. People who take the standard deduction cannot deduct their charitable gifts, and because the standard deduction is doubled under the tax law, far fewer taxpayers – only an estimated 10% — will itemize and be able to deduct their gifts. This change alone is expected to cost charities an estimated $12-20 billion or more annually in lost gifts.     Despite aggressive advocacy by non-profits for the inclusion of an above-the-line deduction in the tax law, it was not included in the final tax overhaul passed by Congress.

H.R. 651 would allow all taxpayers to deduct their charitable donations and would not provide a cap on the amount on the amount of donations that could be deductible. It provides the full universal deduction that non-profit advocates have been seeking. If passed, it would become effective for tax years beginning January 1, 2019.

The Center for Non-Profits supports this bill as well as the state-level charitable giving legislation sponsored by Senators Tom Kean and Troy Singleton. We thank Congressman Smith for re-introducing this important bill and we will be working with allies to move it forward.


More resources on the new federal tax law:

Summary chart of the key provisions for non-profits (Center for Non-Profits)

UBIT and Potential New Taxes on Non-Profits (Center for Non-Profits)

Compliance checklist (National Council of Nonprofits)

Sweeping Federal Tax Reform Enacted (Center for Non-Profits)

[Related: NJ SALT Workaround Bill Signed into Law]