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The 119th Congress will consider $4-5 trillion of tax provisions, and our goal is to ensure that the Universal Charitable Deduction is included in that massive package.

At the close of the 118th Congress, 24 of the Senate’s 100 members had signed on as cosponsors of the Charitable Act, S. 566, the bipartisan legislation of Senators James Lankford (R-OK) and Chris Coons (D-DE), which would provide a universal charitable deduction open to all taxpayers who contribute to charities regardless of their level of income. The companion House version, H.R. 3435, also entitled the Charitable Act, garnered 65 signed-on supporters. Representatives Blake Moore (R-UT), Danny Davis (D-IL), Michelle Steel (R-CA), and Chris Pappas (D-NH) led the House measure. Rep. Steel lost her bid for re-election in November, but the other three sponsors will continue to carry the torch in the new Congress.

What is the issue?

Taxpayers can deduct from their taxable income the charitable donations they made to nonprofit 501(c)3 organizations, lowering their overall tax liability (see the sidebar for definitions of a few key terms).

As a general rule, charitable contributions can only be deducted if you itemize your personal deductions instead of taking the standard deduction. If you do not itemize, you do not get the benefit. A Universal Charitable Deduction allows people to deduct charitable contributions up to a maximum amount, regardless of their income level and whether they itemize or take the standard deduction. The bipartisan Charitable Act would encourage more giving from middle-income families.

Giving trends from 2020 and 2021, when the temporary non-itemizer charitable deduction was in place, indicate the deduction works. According to the Fundraising Effectiveness Project, charitable gifts of $300 — the cap of the temporary deduction in 2020 — increased by 28 percent on the last day of the year. Furthermore, interim Internal Revenue Service data for tax year 2021 shows 47 million households used the non-itemizer charitable deduction for donations totaling around $18 billion. A higher deduction cap in the Charitable Act would encourage even more charitable giving in communities nationwide.

Why do nonprofits care?

The ability for individuals to deduct charitable donations from their tax liability encourages charitable giving and the flow of financial resources to support nonprofit work.  

When a larger standard deduction went into effect in 2018, fewer people itemized because people itemize only when itemizing would result in a deduction larger than the standard deduction. Thus, fewer people were eligible for the tax incentive of giving.

What is the ideal policy?

TNPA calls on Congress to make the Universal Charitable Deduction a permanent provision in the Tax Code and to increase the $600 married/$300 single taxpayer cap on the Universal Charitable Deduction. 

Recent activity

The enactment of the Tax Cuts and Jobs Act (TCJA) of 2017 effectively doubled the Standard Deduction to $12,000 for individual taxpayers and $24,000 for married couples filing jointly. Adjusted for changes in the Consumer Price Index (CPI), these levels increased to $15,000 and $30,000 for 2025.

This change in the Standard Deduction reduced the number of taxpayers itemizing—and thus being able to claim a deduction for charitable contributions—from approximately 30% of all taxpayers to just 7.5%. This means that fewer than eight percent of taxpayers are eligible to receive a charitable contribution benefit.

In March 2020, the $2.2 trillion CARES Act of 2020 was signed into law, establishing a universal charitable deduction of $300 per taxpayer, regardless of whether filing as an individual or married, for the tax year 2020. Then, in December 2020, the $900 billion Consolidated Appropriations Act of 2021 was signed into law. This act included an increase for 2021 in the Universal Charitable Deduction for married couples filing jointly to $600. TNPA was a leading voice in the effort to enact this important deduction.

In late 2022, it appeared Congress would pass the package of 27 expired tax provisions, including the  Universal Charitable Deduction, which expired on December 31, 2021. Unfortunately, Congress could not come to closure on the package, leaving us without any Universal Charitable Deduction.

Senators James Lankford (R-OK) and Chris Coons (D-DE) introduced their Universal Charitable Deduction legislation, renaming it from “The Universal Giving and Pandemic Response and Recovery Act” to simply the “Charitable Act” (bill number S. 566). It again calls for a universal charitable deduction open to all taxpayers regardless of their income level, up to 1/3 of the current standard deduction, which is $15,000 for single tax filers and $30,000 for married couples filing jointly. Rather than being a one-year bill as was previously the case, The Charitable Act would have run for two years, 2024 and 2025.

The legislation’s universal deduction level is an aspirational number. The immediate focus is reinstating the deduction at $600 for married couples and $300 for single filers, as with the legislation that expired at the end of 2021. TNPA’s ultimate goal is to increase the size of the deduction from the $600/$300 level and, importantly, make it permanent.