Changes Ahead for Charitable Giving
Effective January 1, 2026, the One Big Beautiful Bill Act (OBBB, H.R. 1) introduces significant changes to charitable contribution rules that will impact tax planning for both individual and corporate donors. This summary highlights the key provisions and actionable strategies.
| Provision | 2026 Rule | Planning Tip |
|---|---|---|
| Individual | ||
| 0.5% AGI Floor (Itemizers) | Charitable deduction only for amounts above 0.5% of Adjusted Gross Income (AGI). Example: If AGI = $100,000, the first $500 of giving is not deductible. | Bunch donations into one year to exceed the floor.
Consider making large gifts in 2025 rather than 2026. |
| 35% Cap on benefit of Itemized Deductions | High earners in the 37% bracket get max 35% tax savings from itemized deductions. | Consider accelerating giving to 2025 before the cap applies. |
| 60% AGI Limit for Cash Gifts | Permanent rule — cash gifts to public charities are deductible up to 60% of AGI. | Plan large cash gifts within the limit for maximum deduction. |
| Universal Charitable Deduction | $1,000 (single) / $2,000 (MFJ) for non-itemizers; excludes DAFs, supporting orgs, and private foundations. | Even if using the standard deduction, make qualifying cash gifts to benefit. |
| K–12 Scholarship Credit (2027) | Nonrefundable credit up to $1,700 (or 100% of gift) for contributions to scholarship-granting organizations. | Plan ahead for 2027 to take advantage of the new credit. This contribution cannot also be a charitable deduction. |
| Corporate | ||
| Corporate Giving Floor | Only gifts exceeding 1% of taxable income are deductible; still subject to the 10% cap; 5-year carryforward. | Schedule giving to exceed the floor and utilize carry forward if needed. |
These new charitable giving rules present both challenges and opportunities for taxpayers. By planning ahead and strategically timing contributions, donors can continue to maximize their philanthropic impact while optimizing tax benefits. Consult with your Dent Moses advisor for additional information.