Plain Language Summary
# Summary of the Charitable Act (S. 317) **What It Would Do:** The Charitable Act would make it easier for average taxpayers to get tax deductions for charitable donations. Currently, only people who "itemize" their deductions (a more complex tax filing option) can deduct charitable contributions. This bill would allow people who take the standard deduction (the simpler, more common option) to deduct charitable contributions up to one-third of their standard deduction starting in 2026 or 2027.
The bill would also eliminate a 50% tax penalty that currently applies when people overstate their charitable contributions. **Who It Affects:** This primarily affects individual taxpayers who donate to charities but use the standard deduction rather than itemizing. The bill aims to incentivize charitable giving by removing a barrier that currently discourages average donors from claiming deductions. **Current Status:** The bill is currently in committee, meaning it has been introduced but has not yet been debated or voted on by the full Senate. It was sponsored by Senator James Lankford (R-OK).
CRS Official Summary
Charitable ActThis bill allows an individual taxpayer who does not itemize their tax deductions to claim a tax deduction for charitable contributions and eliminates the tax penalty for overstating charitable contributions. (Some limitations apply).Under the bill, for tax years beginning in 2026 or 2027, an individual taxpayer who does not itemize their tax deductions may deduct charitable contributions of up to one-third of the standard deduction allowed to such individual. (Under current law, an individual taxpayer generally must itemize their tax deductions to deduct charitable contributions.)The bill also eliminates the tax penalty for an underpayment of taxes attributable to overstated charitable contributions by taxpayers who do not itemize deductions. (Under current law, taxpayers who claim a deduction under this bill may be assessed a tax penalty in the amount of 50% of the portion of an understatement of tax liability attributable to overstated charitable contributions.)
Latest Action
Read twice and referred to the Committee on Finance.