Peter V. Arcese

Charitable Contributions - OBBBA Changes

Beginning in 2026, the One Big Beautiful Bill Act (OBBBA) has made two important changes to the rules for deducting charitable contributions. 

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Change #1. New Deduction for Non-Itemizers 

Starting in 2026, the OBBBA provides a new charitable contribution deduction for non-itemizers (i.e., individuals who claim the standard deduction). The maximum deduction is $1,000 for single filers and $2,000 for married individuals filing jointly.

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Any contribution you make in cash to a public charity is eligible for the new deduction. Contributions to donor advised funds and private foundations do not qualify. Cash contributions include payments made by cash, check, electronic funds transfer, online payment service, debit card, credit card, payroll deduction, or a transfer of a gift card redeemable for cash. As with any charitable contribution, you need keep a record of the contribution.

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Change #2. New Deduction Floor for Itemizers

Starting in 2026, the OBBBA imposes a 0.5-percent floor on charitable contributions for individuals who elect to itemize. Specifically, the amount of your charitable contributions for a tax year is reduced by 0.5 percent of your adjusted gross income for the year.

Example: Patricia, a single taxpayer, has $400,000 in adjusted gross income in 2026 and $10,000 in charitable contributions. Patricia's charitable contributions floor is $2,000 (0.5 percent of $400,000). If Patricia itemizes her deductions, she can claim an $8,000 charitable contributions deduction ($10,000 in contributions minus her $2,000 floor). 

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In the example, Patricia's tax bill will be $700 higher than if the floor had not been applied ($2,000 lost deduction x 35 percent marginal tax rate).

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Call to make an appointment to discuss the changes in the charitable contribution rules or any other estate planning issues you have on your mind.