Should the deadline for charity tax deductions be extended to April 15, so tax filers can make last-minute donations?
Or would it take a bite out of the holiday and year-end giving blitz that nonprofits have come to enjoy?
That’s been a key part of a debate among philanthropy policy wonks in Washington for years. But last year, the provision to extend the donation deadline to April 15 was approved by the House as part of its America Gives More Act. It was not included in Senate legislation, and therefore didn’t have legs.
It’s unclear whether the provision will be part of any congressional action this year. But the notion that tax filers, possibly flush with unexpected tax refunds, could donate to charities retroactively finally has some traction, proponents say.
The idea is not without precedent, wrote Eugene Steuerle, a senior fellow at the Urban Institute in Washington, D.C. President Obama signed a provision allowing donations to be made for Haiti earthquake relief up until March 2010 to be deducted on 2009 tax returns. Likewise, George W. Bush permitted donations for tsunami relief made through Jan. 31, 2005, to be deducted in the previous year.
He called tax filing time a “window of opportunity.’’ Americans know their total annual income, their projected taxes and how charitable donations could both benefit their bottom line and those of charities.
“When filing taxes, they [Americans] can calculate exactly how much tax an additional donation would save,’’ Steuerle wrote.
While endorsed by charities such as the national Meals on Wheels Association, the April 15 deadline was not broadly endorsed by charities. Mega-charities such as United Way of America, for example, didn’t take a position on it.
Some nonprofits feared the effect on the coveted year-end giving. Others worried that it would simply shift the time frame for making donations, creating delays that could clog their cash flow.