What This Bill Does
This bill changes the tax rules for people who donate to charity but do not itemize deductions on their taxes. The bill allows certain taxpayers to deduct a portion of their charitable donations even when they choose not to itemize. The bill also removes certain tax penalties related to these charitable donation deductions.
Who It Affects
Individual taxpayers who do not elect to itemize deductions on their tax returns.
Key Provisions
• For tax years 2023 and 2024, individuals who do not itemize deductions can deduct charitable contributions up to one-third of their standard deduction amount (Sec. 2(a)).
• Paragraph 9 of section 6662(b) of the tax code is removed from the law (Sec. 2(b)(1)).
• Subsection (l) of section 6662 is removed from the law (Sec. 2(b)(2)).
What Changes
If this bill becomes law, taxpayers in 2023 and 2024 who do not itemize deductions will be able to deduct some charitable contributions on their tax returns. Additionally, certain tax penalties and related code sections will be eliminated or renumbered.
Important Definitions
• Itemizing deductions: choosing to list specific expenses (like charitable donations) individually rather than taking a standard deduction.
• Standard deduction: a set dollar amount that reduces taxable income for taxpayers who do not itemize.
Effective Date
Tax years beginning after December 31, 2022 (Sec. 2(c)).
II
118TH CONGRESS
1ST SESSION
S. 566
To amend the Internal Revenue Code of 1986 to modify and extend the
deduction for charitable contributions for individuals not itemizing deductions.
IN THE SENATE OF THE UNITED STATES
FEBRUARY 28, 2023
Mr. LANKFORD (for himself, Mr. COONS, Mr. RUBIO, Ms. CORTEZ MASTO,
Ms. HASSAN, Mr. WARNOCK, Ms. COLLINS, Ms. KLOBUCHAR, Mr. SCOTT
of South Carolina, Mr. PETERS, and Mrs. SHAHEEN) introduced the fol-
lowing bill; which was read twice and referred to the Committee on Fi-
nance
A BILL
To amend the Internal Revenue Code of 1986 to modify
and extend the deduction for charitable contributions
for individuals not itemizing deductions.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘Charitable Act’’.
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•S 566 IS
SEC. 2. MODIFICATION AND EXTENSION OF DEDUCTION
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FOR CHARITABLE CONTRIBUTIONS FOR INDI-
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VIDUALS NOT ITEMIZING DEDUCTIONS.
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(a) IN GENERAL.—Subsection (p) of section 170 of
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the Internal Revenue Code of 1986 is amended to read
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as follows:
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‘‘(p) SPECIAL RULE FOR TAXPAYERS WHO DO NOT
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ELECT TO ITEMIZE DEDUCTIONS.—In the case of a tax-
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able year beginning in 2023 or 2024, the deduction under
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this subsection for the taxable year shall be equal to so
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much of the deduction determined under this section
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(without regard to this subsection) for such taxable year
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as does not exceed an amount equal to 1⁄3 of the amount
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of the standard deduction with respect to such individual
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for such taxable year. This subsection shall apply only in
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the case of an individual who does not elect to itemize de-
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ductions for the taxable year.’’.
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(b) ELIMINATION OF PENALTY.—
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(1) IN GENERAL.—Section 6662(b) of the In-
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ternal Revenue Code of 1986 is amended by striking
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paragraph (9) and by redesignating paragraph (10)
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as paragraph (9).
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(2) INCREASED
PENALTY.—Section 6662 of
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such Code is amended by striking subsection (l).
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(3) CONFORMING AMENDMENTS.—
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•S 566 IS
(A) Sections 6662(h)(2)(D) of such Code
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is amended by striking ‘‘subsection (b)(10)’’
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and inserting ‘‘subsection (b)(9)’’.
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(B) Section 6664(c)(2) of such Code is
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amended by striking ‘‘section 6662(b)(10)’’ and
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inserting ‘‘section 6662(b)(9)’’.
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(C) Section 6751(b)(2)(A) of such Code is
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amended by striking ‘‘by reason of paragraph
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(9) or (10) of subsection (b) thereof’’ and in-
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serting ‘‘by reason of subsection (b)(9) there-
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of’’.
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(c) EFFECTIVE DATE.—The amendments made by
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this section shall apply to taxable years beginning after
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December 31, 2022.
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Æ
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