March 17, 2022
Senate Finance holds charitable/nonprofit hearing
The March 17 Senate Finance Committee hearing, "Examining Charitable Giving and Trends in the Nonprofit Sector," focused on the role charities have played during the pandemic, the situation in Ukraine, and what Congress can do to encourage charitable giving, including reinstating the temporary $300 charitable deduction for nonitemizers that was in effect for 2020–2021 ($600 for married couples filing jointly in 2021). There was also discussion of the Employee Retention Tax Credit (ERTC), which was important to the nonprofit sector. It was terminated as of September 30, 2021 under the November infrastructure bill and is proposed to be reinstated.
Chairman Ron Wyden (D-OR) said the charitable deduction is a lifeline not a loophole and invoked images of car lines for miles at food pantries at the start of the pandemic. He said there ought to be bipartisan interest in reviving the nonitemizer deduction and expanding it to promote more giving. "[I]n addition to promoting donations, the Senate ought to look at ways of helping nonprofits operate, keep their doors open and keep their workers on the job," he said.
Senator James Lankford (R-OK) also raised the issue of the additional pandemic charitable deduction and defended the tax deduction for charitable contributions generally. He is the lead sponsor of the Universal Giving Pandemic Response and Recovery Act (S. 618, H.R. 1704), which for 2021–2022 would provide a deduction for charitable giving on federal income taxes valued at up to one-third of the standard deduction (around $4,000 for an individual filer and $8,000 for married joint filers) for taxpayers that do not itemize their deductions.
Additional information is available in the attached Tax Alert.