2026 Charitable Deduction Law Changes

The One Big Beautiful Bill Act has led to changes in charitable contribution deduction rules for the 2026 tax year.

Here are some of the nuances:

Taxpayers Who Itemize

• 0.5% AGI Floor: You can only deduct charitable contributions to the extent you exceed 0.5% of your Adjusted Gross Income (AGI). For example, if your AGI is $300,000, the first $1,500 of your donation is not deductible. This includes both cash and non-cash contributions.

• 60% Cap: The ceiling for cash donations to public charities is permanently set at 60% of your AGI.

• Haircut for the 37% tax bracket: For earners in the 37% tax bracket, the tax benefit of itemized deductions (including charitable gifts) is effectively capped at a 35% rate. This applies to single filers with taxable income above $640,600 and joint filers above $768,700.

• Carry forward: Unused contributions exceeding the 60% cap can still be carried forward for up to 5 years, provided your initial total contributions cleared the 0.5% AGI floor.

Taxpayers Who Take The Standard Deduction

• Non-itemizers can now claim a permanent above-the-line deduction for cash contributions made directly to qualified public charities. The limits are as below -

  • Single Filers: Up to $1,000

  • Married Filing Jointly: Up to $2,000