Committee hears bill to allow $12,000 tax deduction for living organ donors

The House Finance Committee held a public hearing on House Bill 422, which would allow living organ donors to deduct up to $12,000 in reimbursable, out-of-pocket expenses from taxable income.

Representative Jim Haddock, sponsor of the bill, told the committee the deduction would cover costs donors often face that are not reimbursed by recipient insurance, such as travel, lodging, meals, lost wages and related medical expenses. “Sometimes those costs can be in the thousands of dollars and can be a barrier to the donation,” Haddock said, noting more than 8,000 Pennsylvanians are on organ waiting lists.

Lynn Wright, program coordinator at the Kidney Foundation of Central Pennsylvania and a living donor herself, testified in support. Describing her own experience donating a kidney, Wright said donors can incur significant out-of-pocket costs for travel, lodging, testing and follow-up care. “A tax deduction would alleviate the personal financial burden on donors and encourage more people to consider this incredible gift,” Wright said.

Committee members asked questions about safeguards and broader effects. Representative Arvin Venkat, a physician and clinical-ethics director, said he had previously raised concerns about potential financial inducements but concluded the bill’s dollar amounts are small enough to avoid those risks and that the measure was carefully crafted. Venkat said he ultimately supported the bill but urged caution in future changes to avoid creating a transactional market for organs.

Representative Valerie Gaydos asked whether recipients may reimburse donors for travel and related costs; witnesses and members responded that customary small gestures (for example, a meal) occur but that U.S. transplant regulations generally prohibit significant financial remuneration tied to donation and that the bill is targeted at genuine out-of-pocket expenses. Committee staff noted the bill’s draft language caps the deduction at $12,000 and estimated — using a cited state tax rate of 3.7% — that a donor deducting the full amount could reduce state tax liability by about $368.

The committee did not vote on House Bill 422 at the hearing. Committee leadership indicated the sponsor intends to bring the bill up at a future meeting (anticipated in late March) and reminded members of an amendment deadline 24 hours before the next meeting.

Ending: The bill is expected to return to committee for formal consideration; members asked staff to provide any follow-up fiscal details requested by revenue staff before a future vote.