We have received text from H.R. 801: Charitable Act. This bill was received on 2025-01-28, and currently has 20 cosponsors.
Here is a short summary of the bill:
This bill, titled the Charitable Act, proposes changes to the Internal Revenue Code regarding tax deductions for charitable contributions, specifically for individuals who do not itemize their deductions on their tax returns. Here are the main components of the bill:
Modification of Charitable Contribution Deductions
The bill seeks to revise section 170 of the Internal Revenue Code to allow individuals who do not choose to itemize deductions for the tax years 2026 and 2027 to claim a charitable contribution deduction. This deduction would be calculated as one-third of the standard deduction amount applicable to the individual taxpayer for the respective taxable year.
Elimination of Penalties
The legislation includes provisions to eliminate certain penalties related to the handling of deductions:
- Removal of a specific penalty: The bill proposes to delete an identified penalty related to deductions, effectively reducing the potential for penalties that could apply to charitable contributions.
- Increased penalties adjustments: Section 6662 of the Internal Revenue Code will be amended to remove an existing clause, thereby enhancing the clarity on penalties without the previous subsection's implications.
- Conforming amendments: The bill makes additional adjustments to ensure that other sections of the Internal Revenue Code are aligned with the changes made by this bill.
Effective Date
The changes outlined in the bill are slated to take effect for taxable years beginning after December 31, 2025. This means that the new rules for deductions and penalties will apply starting with the 2026 tax year.
Summary
In summary, the Charitable Act introduces a mechanism to allow a tax deduction for charitable contributions for individuals who do not itemize deductions, establishes specific limits to those deductions, removes certain penalties, and lays the groundwork for these changes to become effective in 2026.
Relevant Companies
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