Charitable Deduction and Tax Reform

The Unified Framework for Fixing Our Broken Tax Code released by GOP leaders and the Administration late last month calls for preserving the charitable deduction. However, nonprofit leaders are concerned that the proposed increase to the standard deduction will result in a decreased pool of itemizers who could benefit from the charitable deduction.

“When 30 percent of individual online giving takes place in December and 38 percent of that total takes place in the last three days of the year, it’s obvious that the charitable giving incentive in the current tax code has a powerful influence to motivate financial support in communities,” said Tim Delaney, president and CEO of the National Council of Nonprofits. “And we’ve seen at the state level what happens when incentives to give are removed. In just one state in just one year, more than $60 million in charitable contributions were lost when the state capped itemized deductions. Doubling the standard deduction would have a similar effect as millions more people would no longer receive a tax benefit for their charitable contributions.”

To counter the potential adverse outcomes of fewer itemizers, nonprofit advocates are calling for an expansion of charitable incentives through a non-itemizer or universal deduction.

Post date: October 11, 2017
Topics: News from the National Council | National Legislative Updates

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