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The Year-End Outlook for Renewing An Important Charitable Giving Incentive 

Last week, the Charitable Giving Coalition hosted a two-day fly-in to urge lawmakers to renew and expand the universal charitable deduction for non-itemizers, which expired at the end of 2021. The Grow Giving Now Fly-In welcomed more than 50 charitable leaders to Washington, DC, to meet with lawmakers and their staff, expressing support for the non-itemizer deduction and stressing the importance of the giving incentive. 

A temporary universal charitable deduction for non-itemizers was enacted by Congress in March 2020 and expanded ($300 for single filers/$600 for joint filers) in December 2020. Unfortunately, that provision expired at the end of 2021 and has yet to be restored, creating uncertainty for both donors and the nonprofits that rely on charitable donations. With inflation and economic uncertainty causing donors pause before giving more money away, an enhanced tax incentive for charitable giving could help spur additional giving from all taxpayers.

Lawmakers’ return to DC last week following the midterm election proved to be the perfect time for charitable leaders to stomp the Hill in support of increasing charitable giving. But the question remains, will a package come together in the lame duck to support renewing this important incentive? There is a chance lawmakers could extend many of the now expired or expiring tax provisions, known as extenders, but with less than 15 legislative days left in this Congress and a long list of must-pass items, timing and politics still have the ability to get in the way of negotiations. 

There are a few different outcomes we could see. First, lawmakers could punt spending negotiations to the new year by continuing current funding levels for a couple months, especially if either party sees more political leverage in waiting for the new Congress. Alternatively, lawmakers could negotiate a large omnibus package to include government funding, retirement legislation, tax extenders, like the universal charitable deduction, and other priority issues to “clear the decks” for the new Congress. What is most likely, however, is a smaller package that funds the government and includes retirement legislation along with a select few tax provisions, like an expanded child tax credit and corporate tax credits, and perhaps a renewal of the non-itemizer charitable deduction. 

All of this is to say, getting a renewal of the universal charitable deduction remains a real possibility in year-end legislation. What nonprofit leaders heard during the fly-in is that lawmakers need to hear from the sector about its priorities, so now is the time to contact your lawmakers to ensure you are included in these conversations. And if you’d like to sign onto the Charitable Giving Coalition’s letter to encourage lawmakers to renew the universal charitable deduction, you can find more information here

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