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Universal Charitable Deduction

June 13, 2023 2:47 PM | Anonymous

The data is in and it shows that the universal charitable deduction that Congress put in place temporarily in 2020 and 2021 during the pandemic worked. Taxpayers who took the standard deduction on their 2021 tax returns were able to claim an additional $18 billion in donations to the work of charitable nonprofits thanks to the universal charitable deduction, according to interim data released by the Internal Revenue Service last week. More than 47 million households utilized a tax incentive enabling individuals to claim $300 in charitable deductions and couples to claim up to $600 in deductions even while also taking the standard deduction. One-fifth (21.3%) of those donations came from taxpayers with adjusted gross income of less than $30,000. In 2020, when the special deduction was limited to $300/household, 42.2 million households claimed $10.9 billion in additional giving. The universal charitable deduction expired after 2021.

This is great information to include in conversations with members of the Louisiana Congressional delegation or their staff. Passage of the Charitable Act (S.566 / H.R. 3435), an improved version of the giving incentive, is a major legislative priority of the charitable nonprofit community this year.

Source: National Council of Nonprofits

 
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