The One Big Beautiful Bill (“OBBBA”) preserved one familiar charitable giving rule-but quietly changed several others in ways that make timing more important than ever.
While OBBBA extended the provision allowing taxpayers to deduct cash contributions to public charities of up to 60% of their contribution base (modified adjusted gross income (AGI)), it also introduced new deductions and new limitations that donors should understand before writing a check.
A Win for Non-Itemizers-Starting in 2026
One of the most taxpayer-friendly changes is a new permanent charitable deduction for non-itemizers.
Beginning in 2026, taxpayers who claim the standard deduction may deduct:
- $1,000 for single filers, or
- $2,000 for married couples filing jointly
for cash contributions made to public charities or donor-advised funds.
This provision builds on the temporary COVID-era deduction that allowed non-itemizers to deduct $300 ($600 MFJ) of cash charitable gifts. OBBBA not only increases the amount, but makes the deduction permanent.
Bottom line: If you typically take the standard deduction, charitable contributions made in 2026 (even early in the year) will finally produce a tax benefit again.
New Limits for Itemizers: A Deduction Floor
For taxpayers who itemize, the news is more mixed.
OBBBA retained the familiar rule allowing cash charitable deductions of up to 60% of a taxpayer’s contribution base. However, beginning in 2026, a new deduction floor applies:
- Only charitable contributions exceeding 0.5% of your contribution base will be deductible.
For example, a taxpayer with a $1,000,000 contribution base will not receive any deduction for the first $5,000 of charitable contributions. Only amounts above that threshold will count.
On top of that, other limitations such as the alternative minimum tax revisions may further reduce overall itemized deductions-making charitable giving less tax-efficient for some higher-income taxpayers.
Planning Opportunity: Give Now, Deduct Now
If you expect to itemize deductions and plan to make charitable gifts in 2026 or later, it may make sense to accelerate those contributions into 2025-before the new floor takes effect.
Not sure who you want to support yet? A donor-advised fund (DAF) can be an effective solution. By establishing and funding a DAF before the end of 2025, you can:
- Claim the deduction in 2025, and
- Recommend grants to charities in future years, including 2026 and beyond.
The Takeaway
- If you itemize deductions: Consider making charitable contributions now, before the new deduction floor applies.
- If you take the standard deduction: It may be better to wait until 2026, when the new permanent deduction becomes available.
As always, charitable giving should reflect your personal values first-but smart tax planning can help ensure your generosity goes further.
