Friday, August 28, 2020

Congress proposes potential expansion to charitable deduction for taxpayers

A bill introduced on the floor of Congress June 22nd is attracting bipartisan approval and could signal a significant change in how taxpayers choose to do their deductions this year. The Universal Pandemic Response Act, proposed by republican senator James Lankford of Oklahoma, would increase the limit for above-the-line charitable deductions to one third of the standard deduction. Breaking the matter down to hard numbers, this piece of legislation would increase the charitable deduction from $300 to $4,133 for individual taxpayers and $8,267 for taxpayers filing jointly. This proposal would be a significant expansion on what has traditionally been a relatively small available deduction for taxpayers: perhaps cognizant of this, the law is set to have a short lifespan and would only extend to the end of this tax year, though it will also allow for amended 2019 tax returns with contributions made before July 15th. Though the bill originated from the right side of the Senate, the bill has gained bipartisan support as democratic senator Chris Coons of Delaware allied with senator Lankford to rally both political parties to pass the bill. With the global financial turmoil which has followed in the wake of the COVID epidemic Americans nonprofits stand to suffer as much as, if not more than, their for-profit counterparts. Perhaps the passage of this proposed legislation will incentivize American taxpayers to lend some more support to nonprofit organizations during this time of crisis.

To view the proposed law, see the following official link from Congress: https://www.congress.gov/bill/116th-congress/senate-bill/4032

By David A. Brennen, Professor of Law at the University of Kentucky  

https://lawprofessors.typepad.com/nonprofit/2020/08/congress-proposes-potential-expansion-to-charitable-deduction-for-taxpayers.html

Federal – Legislative, In the News | Permalink

Comments

It is worth mentioning that the National Council of Nonprofits and its networks of state associations of nonprofits has worked tirelessly across both sides of the aisle to encourage Senators Lankford and Coons and their colleagues to recognize the importance of this Bill for communities served by nonprofits, aka every community in the nation!

Posted by: Jennifer Hauge | Aug 29, 2020 7:49:13 AM

Post a comment