Tam Tranvu & 

Travis Sirois, CPA – July 27, 2026

OBBBA Updates: Your 2026 Charitable Giving Deductions

The One Big Beautiful Bill Act (OBBBA) was officially passed by Congress on July 1, 2025, and signed into law on July 4, 2025. 

How does the One Big Beautiful Bill Act (OBBBA) affect your charitable deductions in 2026?

In 2025, the OBBBA passed and with it came a flurry of changes. Some of these changes immediately impacted taxpayers while others, such as the changes to charitable deductions, were scheduled to go into effect in 2026. The updates to charitable giving rules effect most taxpayers as they apply to those that take both standard and itemized deductions.

In this article we will break down some of the key questions many have about the changes to charitable contributions introduced by the OBBBA that went into effect in 2026. Whether you are looking to understand how your filing situation might have shifted or simply want to stay informed about current tax developments.

I usually take the standard deduction, does the 2026 OBBBA change anything for me?

• Yes. There is a new “below the line” charitable deduction, up to $1,000 ($2,000
  for married filing jointly) available for standard filers. Contributions must be made
  in cash or cash equivalents to a qualified charitable organization.
• Prior to 2026, taxpayers who took the standard deduction generally did not receive
  any tax benefits from charitable donations. This change is a small added benefit for
  these taxpayers.
• The deduction is very similar to the temporary $300 deduction that was available to
  standard filers during the Covid-19 pandemic.

I always itemize deductions, how has my charitable deduction changed from 2025 to 2026?

• What stayed the same:
  • The criteria for what donations qualify as a charitable contribution did not change

• What has changed:
  • A new 0.5% adjusted gross income (AGI) “floor” has been introduced by the
    OBBBA.
  • The floor changes how charitable contributions are handled when itemizing. Now
    only the portion of your contribution above 0.5% of your AGI is tax deductible. This
    floor is applied to the total sum of all your contributions during the tax year instead
    of only affecting one type of contribution.
  • The 0.5% floor in 2026 effectively reduces the value of smaller donations.
    Example:
    ▪ Adjusted Gross Income: $100,000
    ▪ 0.5% Floor: $500
    ▪ Total Charitable Contribution: $5,000
    ▪ Deductible Amount: $5,000 – $500 = $4,500

Note: If you are planning on itemizing, you cannot claim both the standard deduction add-on AND the itemized charitable deduction

What is the effect of the OBBBA updates on high earners?

• There is an additional limitation that is placed on taxpayers that itemize and are in the
  highest tax bracket of 37%. The OBBBA introduced a 35% tax deduction cap. This means
  that high earners receive a lower effective tax break.
• Combined with the itemized deduction changes to charitable deductions, the tax benefit of
  donations has been lowered.
• Example for high income earners:
  • Adjusted Gross Income: $1,000,000
  • Total Charitable Contributions: $200,000
  • 2026 deductible amount with the 0.5% floor: $200,000 – $5,000 = $195,000
  • 2026 Potential tax benefit: $195,000 x 35% (instead of 37%) = $68,250
  • Potential tax benefit under 2025 rules: $200,000 x 37% = $74,000

You can see how this 35% limitation does not reduce the amount of charitable contribution itself but rather limits the tax benefits that you could receive from the deduction. High income earners need to be aware of these updates and cannot assume they are getting the same tax benefit year after year.

Concluding Thoughts

The OBBBA introduces significant changes to how charitable contributions are treated for tax purposes beginning in 2026. While the new deduction creates a chance for those who claim the standard deduction to receive an increased benefit, those who itemize may see reduced benefits due to new limitations, especially if you are a high earner. As a result, it is important to have a conversation around your charitable giving with our tax team before making any substantial donations so we can provide you with proactive guidance tailored to your unique tax situation.