The Charitable Act allows taxpayers who take the standard deduction to also claim a charitable contribution deduction of up to one-third of their standard deduction in 2026 and 2027. It also eliminates the penalty for overstating charitable contributions.
Latest Action
Read twice and referred to the Committee on Finance.
AI Summary
Plain-English explanation of this bill
The Charitable Act allows taxpayers who take the standard deduction to also claim a charitable contribution deduction of up to one-third of their standard deduction in 2026 and 2027. It also eliminates the penalty for overstating charitable contributions.
Last updated: 1/5/2026
Official Summary
Congressional Research Service summary
<p><strong>Charitable Act</strong></p><p>This 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).</p><p>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.)</p><p>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.)</p>
Key Points
Main provisions of the bill
Allows charitable deduction without itemizing
Caps at one-third of standard deduction
Applies to tax years 2026 and 2027
Eliminates overstatement penalty
Encourages charitable giving for all taxpayers
How This Impacts Americans
Potential effects on citizens and communities
Non-itemizing taxpayers would have incentive to make charitable donations. Charities could see increased donations from middle-income donors. The tax benefit would be temporary for two years unless extended.
Policy Areas
Primary Policy Area
Taxation
Scope & Jurisdiction
Jurisdiction Level
federal
Congressional Session
119th Congress
Citation Reference
317, 119th Congress (2025). "Charitable Act". Source: Voter's Right Platform. https://votersright.org/bills/118-s-317