Line 40 of Form B22A, also known as the “means test” form for use in chapter 7 cases, allows you to include an expense for charitable contributions. This line reads as follows:
Continued charitable contributions. Enter the amount that you will continue to contribute in the form of cash or financial instruments to a charitable organization as defined in 26 U.S.C. section 170(c)(1)-(2).
Line 45 of Form B22C, the “means test” form for use in chapter 13 cases, is worded a bit differently. Also, an extra qualification apppears at the end of Line 45 which does not appear in Line 40 on Form B22A. Line 45 of Form B22C reads as follows:
Charitable contributions. Enter the amount reasonably necessary for you to expend each month on charitable contributions in the form of cash or financial instruments to a charitable organization as defined in 26 U.S.C. section 170(c)(1)-(2). Do not include any amount in excess of 15% of your gross monthly income.
The language in Line 40 suggests that only “continued” contributions are allowed; this may mean that the contribution cannot be something new to your household budget. Line 45 contains no such qualifier. Line 45 requires that the contribution be reasonably necessary, and that it not exceed 15% of your gross monthly income.
For most persons, contributions made to your church or religious organization are a proper subject of this expense category. Persons who tithe ten percent of their income will be especially concerned with this expense. It is interesting to note that fifteen percent of gross monthly income is about ten percent of after-tax monthly income, which effectively allows tithing for most chapter 13 debtors, if they so desire.
The “reasonably necessary” qualifier in Line 45 is imported from section 1325(b)(2) of the bankruptcy law. For most persons, a good faith contribution made to a religious organization, such as collection plate offerings or even tithing, should be allowed as an expense on line 40 or 45.
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Last modified: February 20, 2013