Charitable Giving Deduction 2026: How the One Big Beautiful Bill Changed the Rules

Charitable giving in the United States reached $617.20 billion in 2025, the first year total giving passed $600 billion. Individuals accounted for $394.2 billion of that. The One Big Beautiful Bill Act changed how those donations are deducted beginning with the 2026 tax year, and for the first time since 2021, taxpayers who claim the standard deduction can deduct charitable contributions without itemizing.

According to “Giving USA,” Americans donated $427.71 billion to charity in 2018. This figure includes giving by individuals, bequests, foundations and corporations. Importantly, about two thirds of the giving “pie” is made up by individuals. That share has held steady, with individual giving up 4.1% in 2025.

In 2018 after tax reform passed, there was a drop in the number of households that itemize their deductions on their tax returns. Charities and Non-profits were concerned that taxpayers would not be as giving if they no longer received the deduction for their charitable donations. The number of individual returns claiming a charitable deduction fell from 34 million in 2017 to 15 million in 2018.

Adjusted to 2025 dollars, individual giving went from $378 billion in 2017 to $376 billion in 2018, and reached $397 billion by 2023. People kept donating. They just stopped getting a tax benefit for it.

Non-Itemizers Can Now Deduct Some Charitable Giving

Starting with the 2026 tax year, taxpayers who claim the standard deduction can deduct up to $1,000 in cash contributions, or $2,000 for married couples filing jointly. The deduction is permanent and adjusts for inflation. It applies to cash gifts to qualified operating charities and does not cover contributions to donor-advised funds.

Roughly 86% of taxpayers are expected to take the standard deduction in 2026, according to Tax Foundation estimates, and the standard deduction rises to $16,100 for single filers and $32,200 for joint filers. A temporary version of this deduction existed in 2020 and 2021. The cap was $300 in 2020, and in 2021 it was $300 for single filers and $600 for married couples filing jointly. At that time, 29.4% of filers taking the standard deduction claimed it. The 2026 amounts are more than three times larger.

Itemizers Have a 0.5% Floor

Taxpayers who itemize face a new limit in 2026. Charitable contributions are deductible only to the extent they exceed 0.5% of adjusted gross income.

With an AGI of $200,000, the first $1,000 in donations is not deductible. A $4,000 donation produces a $3,000 deduction. A $750 donation produces nothing. Itemizers who give smaller amounts throughout the year are the most affected by this change.

Donations disallowed by the floor can be carried forward, but only if you are already carrying forward unused donations under one of the AGI-based limits. Bunching is one way to work around it. Combining two or three years of donations into a single tax year can push the total above the floor, or above the standard deduction, when annual giving would not clear either threshold on its own.

Other Changes That May Affect Your Deduction

The 60% of AGI limit on cash contributions is now permanent. It had been scheduled to expire after 2025. Amounts above the limit can still be carried forward for up to five years.

Itemized deductions are worth less at the top of the income scale. For taxpayers in the 37% bracket, the value of an itemized deduction is capped at 35 cents per dollar beginning in 2026. A $10,000 donation that once produced $3,700 in tax savings now produces $3,500.

The SALT deduction cap increased to $40,000 for taxpayers under the income threshold, rising 1% annually through 2029 before returning to $10,000. A higher SALT cap moves some taxpayers back into itemizing, which restores the charitable deduction for them.

A new nonrefundable credit of up to $1,700 for contributions to scholarship granting organizations takes effect in 2027. It is only available in states that choose to participate, and the same donation cannot be used for both the credit and a charitable deduction.

If you itemize, you will claim the charitable deduction on Schedule A of your Form 1040. If you take the standard deduction, the new non-itemizer deduction is claimed on your return without Schedule A. If you are using E-file.com we will automatically include this schedule with your itemized return.

It is important to remember, your donations must be made to what the IRS considers to be qualified organizations. The IRS has provided a search tool on the their website where you can look up the charity you’d like to support to make sure they are a tax exempt organization.

According to the IRS, “If you receive a benefit in exchange for the contribution such as merchandise, goods or services, including admission to a charity ball, banquet, theatrical performance, or sporting event, you can only deduct the amount that exceeds the fair market value of the benefit received or expected to be received.”

Special rules also apply to donations of property or investments that have appreciated in value. To learn more about what qualifies as a charitable donation, refer to IRS tax topic 506 or you can read more on this topic in our article here: https://www.e-file.com/help/charitable-contributions.php

The rules changed, but claiming the deduction did not get harder. E-file.com handles both itemized and standard deduction returns and will apply the charitable deduction you qualify for.

Note: Tax laws may change with little notice. We do our best to keep this information current, but it is provided on an “AS IS” basis. It should not be considered, legal, financial, or other professional guidance. For more, see our terms.