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Shelley Starkey

Charitable Tax Deduction Option Would Expand Under House Bill

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Earlier this month, Representatives Chris Smith (R-NJ) and Henry Cuellar (D-TX) introduced the Charitable Giving Tax Deduction Act (H.R. 5771), a bipartisan bill that would help to incentivize individuals’ charitable giving, an important revenue source for community behavioral health organizations. If passed, this bill would likely help offset expected reductions in charitable giving resulting from the newly-enacted tax reform law.

The Tax Cuts and Jobs Act, a large tax reform package passed in December, doubled the standard tax deduction, which incentivizes more individuals to forego itemizing their tax returns and is estimated to cause charitable giving in the US to decline by up to $13.1 billion. However, the Charitable Giving Tax Deduction Act would allow taxpayers to write off charitable donations regardless of whether they itemize their tax returns or opt for the standard deduction. Additionally, the bill puts no limits on the amount of charitable contributions that can be deducted, likely negating some of the impact of the Tax Cuts and Jobs Act on private donations.

Charitable giving is central to many non-profit community mental health and addiction treatment organizations’ revenue streams, making the Charitable Giving Tax Deduction Act important for supporting National Council members and their operations. This type of funding also often allows for greater flexibility and innovation in program design than grants from public agencies.

“It is always important to give back to the community,” said Congressman Cuellar (D-TX) in a statement on the Charitable Giving Tax Deduction Act. “This bipartisan bill not only encourages us to help our fellow neighbors, but it also makes sure that taxpayers can receive their due deduction for charitable giving if they choose not to itemize. I am glad to support this legislation that will encourage charitable actions.”

The National Council thanks Representatives Smith and Cuellar for their leadership on this important issue, and looks forward to supporting this legislation through Congress.