The One Big Beautiful Bill: Charitable Contribution Deductions

With the One Big Beautiful Bill Act (OBBBA) there are several updates to tax law that taxpayers need to be aware of. The updated deduction for non-itemizing Taxpayers allows those who may not have been able to deduct charitable contributions in the past to now take an above the line deduction. Additional updates to the law impose new rules on the deduction for those who do itemize.

What does this mean for Non-Itemizing Taxpayers?

For taxpayers whose itemized deductions do not exceed their standard deduction, a tax deduction will be allowed for gifts to charity. Beginning in 2026, up to $1,000 for Single Taxpayers or up to $2,000 for Married filing Jointly taxpayers will be allowed. Charitable contributions must be to eligible 501(c)3 charities and cannot be gifts to donor-advised funds.

What does this mean for Itemizing Taxpayers?

For taxpayers who have itemized deductions that exceed the standard deduction, charitable deductions will be allowed only to the extent that they exceed 0.5% of the taxpayers adjusted gross income. The previous provision that allows cash charitable contribution deductions of 60% of the individual’s contribution base has been made permanent.

Regardless of tax deductions, you should still support the charities that you and your family are passionate about. These new rules are simply an additional benefit to supporting your community. As always, please reach out to your tax/financial advisor if you have any questions.