AAU joined education associations in supporting Senator Lankford's charitable giving amendment to the Senate version of the Tax Cuts and Jobs Act, H.R. 1. For the past 100 years, U.S. tax policy, through the charitable deduction, has encouraged individuals to make philanthropic gifts to colleges, universities and independent schools. These gifts support student scholarships, research, faculty, facilities and other programs that help educational institutions achieve their missions.
Currently, the charitable deduction is only available to the roughly 30 percent of U.S. taxpayers who itemize their tax returns. While H.R. 1 preserves the charitable deduction, the doubling of the standard deduction in the legislation would result in only 5 percent of U.S. taxpayers to itemize their tax returns.
Senators can address this projected decline in giving by adopting an amendment filed by Senator Lankford that would allow non-itemizing taxpayers to deduct charitable gifts up to one-third of the standard deduction threshold. If the amendment is adopted, it would allow all non-itemizing individual taxpayers to deduct up to $4,000 in charitable gifts ($8,000 for couples).