Charitable Deductions by State

December 20, 2018

As the end of 2018 approaches, many Americans are considering making end-of-year charitable donations. While the new tax law contains many changes that will impact these decisions, we can look at Internal Revenue Service (IRS) data to gauge how much Americans have deducted for charitable giving in the past.

In tax year 2016, just over 37 million taxpayers took an itemized deduction for their charitable giving, deducting a total of $236 billion in charitable contributions for an average of $6,349. Note that this doesn’t represent the total amount of giving in the United States, just the amount that eligible taxpayers deducted on their income tax returns. It’s also worth noting that wealthier Americans disproportionately benefit from the charitable deduction overall, as it is high-income taxpayers who tend to itemize their deductions.

average charitable deduction, charitable deduction state rankings

Four states had average charitable deductions greater than $10,000 in 2016: Wyoming ($12,991), Arkansas ($10,935), Utah ($10,165), and South Dakota ($10,019). The state with the smallest average, at $3,354, was Rhode Island.

Because the Tax Cuts and Jobs Act greatly increased the standard deduction, it’s estimated that nearly 30 million households will be better off taking the standard deduction instead of itemizing. While this means tax filing will be simpler, it also means these households will no longer benefit from the charitable contribution deduction.

Lower marginal tax rates under the new law also mean that, for those still taking itemized deductions, their value is lessened. While charitable giving will still be subsidized for these taxpayers, it will be subsidized to a lesser extent.

As millions fewer households will itemize going forward, we should expect forthcoming IRS data to show fewer charitable contribution deductions. What this means for charitable giving overall, however, is less certain. Though some households may decrease their giving, others may use new strategies, such as bunching their donations, or maintaining their giving by making multiple years’ worth of donations at once to have enough to itemize. Given that the tax subsidy for charitable donations has decreased, it would not be surprising if tax-motivated charitable giving decreases as well. However, households make giving decisions for a variety of reasons, many of which are not tax related.

Source: Internal Revenue Service Statistics of Income, Table 2.  Individual Income and Tax Data, by State and Size of Adjusted Gross Income, Tax Year 2016, author calculations

State

Rank

Number of Charitable Deductions

Amount of Charitable Deductions (in millions)

Average Charitable Deduction

Alabama 9 470,090 $3,546 $7,542.61
Alaska 28 57,090 $327 $5,729.72
Arizona 37 729,580 $3,701 $5,072.62
Arkansas 2 224,470 $2,455 $10,935.32
California 13 5,154,350 $36,634 $7,107.46
Colorado 24 713,080 $4,269 $5,986.40
Connecticut 31 607,150 $3,319 $5,466.78
Delaware 45 122,180 $558 $4,565.17
D.C. (7) 113,460 $912 $8,038.71
Florida 14 1,854,220 $13,087 $7,057.78
Georgia 7 1,261,830 $10,151 $8,044.67
Hawaii 48 163,170 $671 $4,111.80
Idaho 16 173,440 $1,211 $6,983.28
Illinois 27 1,595,330 $9,240 $5,792.19
Indiana 21 570,380 $3,487 $6,113.38
Iowa 42 351,620 $1,694 $4,817.93
Kansas 17 281,250 $1,952 $6,941.88
Kentucky 32 407,570 $2,198 $5,392.05
Louisiana 18 374,240 $2,487 $6,645.83
Maine 49 135,170 $492 $3,642.64
Maryland 34 1,143,160 $5,999 $5,247.88
Massachusetts 26 1,048,220 $6,093 $5,812.67
Michigan 33 1,064,400 $5,712 $5,366.87
Minnesota 41 811,520 $3,947 $4,863.68
Mississippi 12 250,380 $1,786 $7,135.01
Missouri 19 595,180 $3,850 $6,468.83
Montana 29 112,060 $629 $5,609.03
Nebraska 25 209,070 $1,243 $5,946.21
Nevada 23 292,780 $1,771 $6,048.50
New Hampshire 43 170,560 $807 $4,731.44
New Jersey 47 1,547,390 $6,694 $4,325.77
New Mexico 36 159,060 $814 $5,120.70
New York 15 2,784,390 $19,583 $7,033.17
North Carolina 22 1,127,090 $6,881 $6,104.96
North Dakota 10 49,420 $365 $7,382.15
Ohio 39 1,146,570 $5,778 $5,039.11
Oklahoma 8 305,930 $2,440 $7,975.20
Oregon 40 556,740 $2,747 $4,934.87
Pennsylvania 38 1,454,530 $7,333 $5,041.54
Rhode Island 50 145,120 $487 $3,354.44
South Carolina 20 523,990 $3,377 $6,443.86
South Dakota 4 58,100 $582 $10,019.97
Tennessee 5 504,460 $4,361 $8,644.19
Texas 11 2,275,810 $16,691 $7,333.88
Utah 3 401,590 $4,082 $10,165.43
Vermont 44 65,610 $302 $4,608.79
Virginia 30 1,212,690 $6,717 $5,538.82
Washington 6 855,110 $7,166 $8,380.77
West Virginia 35 95,190 $499 $5,243.70
Wisconsin 46 715,510 $3,142 $4,390.81
Wyoming 1 41,690 $542 $12,991.08

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