This week, President Biden released his budget request to Congress, which serves as a wish list of policy priorities that the administration hopes to achieve in the coming fiscal year.
We are encouraged the President’s budget did not include limitations to the itemizer charitable deduction as President Obama’s budget included each year, which would have seriously depressed charitable giving. However, we had hoped the president would include a renewal of the universal charitable deduction for nonitemizers that was signed into law in 2020 and extended through 2021.
Lawmakers, led by Senators James Lankford (R-OK) and Chris Coons (D-DE), and Reps. Chris Pappas (D-NH) and Jackie Walorski (R-IN), have been working on expanding the charitable deduction to all taxpayers for many years. The effort finally came to fruition at the beginning of the COVID-19 pandemic, a time when support for charitable causes was critical for organizations responding to need in their communities. While the cap was low – $300 for single filers and $600 for joint filers – the nonitemizer charitable deduction sent a signal that all charitable giving, even small gifts, is important.
The Universal Giving Pandemic Response and Recovery Act (S. 618, H.R. 1704) would encourage even more giving by renewing the availability of the nonitemizer deduction and increasing the cap to one-third of the standard deduction, over $4,000 for single filers and $8,000 for joint filers. The Charitable Giving Coalition sent a letter to the Biden Administration in early March encouraging the inclusion of this bipartisan, bicameral effort in the president’s budget.
Although this was not included in the president’s budget proposal, the CGC and its members will continue our work to generate support for the universal charitable deduction. We are confident that democratizing charitable giving will result in widespread support of our communities and will foster a universal dedication to strengthening civil society.