The One Big Beautiful Bill Act made significant changes to the charitable deduction rules, and most of them took effect this year, just in time to reshape how you might approach your year-end giving. Some of the changes help donors who do not itemize. Others make giving somewhat less advantageous for those who do. As the busiest giving season of the year approaches, here is what changed and what it means for you as you plan your year-end gifts.

1. A New Above-the-Line Deduction for Non-Itemizers

What’s Changed

Starting in 2026, taxpayers who claim the standard deduction can also deduct cash contributions to qualified charities of up to $1,000 for individual filers and $2,000 for married couples filing jointly. This deduction is available whether or not the taxpayer itemizes.

Why It Matters to You

Since the standard deduction was increased in 2017, most taxpayers have had no tax incentive to give, because they no longer itemized. This new deduction restores at least a modest incentive if you take the standard deduction. If you make smaller, recurring gifts, this means your year-end contributions may now carry a tax benefit again, even if you do not itemize.

2. A New 0.5% AGI Floor for Itemizers

What’s Changed

For taxpayers who itemize, charitable contributions are now subject to a 0.5% of adjusted gross income floor. In other words, the first half a percent of a donor’s AGI in giving is no longer deductible; only giving above that amount counts.

Why It Matters to You

For example, if you are a married couple with $400,000 in AGI and you give $5,000 to charity in a year, you lose the first $2,000 of that gift to the floor and can only deduct the remaining $3,000. This floor does not affect you if you are a non-itemizer claiming the new above-the-line deduction described above, but it does reduce the tax benefit if you itemize, particularly if your giving falls in the mid-range bands. If your year-end deduction looks smaller than last year’s even though your gift amount did not change, this floor is likely the reason.

3. Other Changes Worth Knowing

The legislation also introduced a 1% AGI floor for corporate charitable deductions and a cap on the value of charitable deductions for taxpayers in the top individual tax bracket. If you are a corporate donor or in the top individual bracket, these changes reduce, at the margins, the tax benefit of your year-end giving.

What You Should Consider Before Year-End

• If you take the standard deduction, remember that you can now deduct up to $1,000 (or $2,000 if married filing jointly) in cash gifts, so factor that into your year-end giving.
• If you itemize, be aware that the new AGI floor may reduce your deduction, and talk with your tax advisor about how it affects your giving this year.
• whether bunching multiple years of gifts into a single year makes sense so that your giving clears the new floor, a strategy worth discussing with your advisor before December 31.
• Remember that quid pro quo rules, documentation requirements for gifts over $250, and other existing substantiation rules still apply. Keep your receipts and acknowledgment letters for any year-end gifts.

None of these changes are reasons to stop giving, but they are reasons to plan your year-end gifts thoughtfully. A short conversation with your tax advisor before December 31 can help you make the most of your generosity under the new rules.

Ellis Carter is a nonprofit lawyer with Caritas Law Group, P.C. licensed to practice in Washington and Arizona. Ellis advises nonprofit and socially responsible businesses on federal tax and fundraising regulations nationwide. Ellis also advises donors concerning major gifts. To schedule a consultation with Ellis, call 602-456-0071 or email us through our contact form. This post is for general informational purposes and does not constitute legal advice.