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Giving to charity is a great way to support causes you care about, and it often comes with a tax benefit in the form of a charitable contribution deduction. However, if you’re a US taxpayer, it’s important to be aware of some significant upcoming changes to these deductions. These changes will impact how much you can deduct and who is eligible to claim the deduction, starting in the 2025 and 2026 tax years.
This guide will break down the old rules versus the new ones, explaining what these changes mean for your tax planning and charitable giving.
For many years, the rules for deducting charitable contributions were relatively straightforward. To claim a deduction for donations you made, you had to itemize your deductions on Schedule A of your federal tax return.
If the standard deduction was higher than your total itemized deductions (including things like state and local taxes, mortgage interest, and charitable contributions), you would simply take the standard deduction. In this case, your charitable contributions would not provide a tax benefit. This system meant that millions of taxpayers who didn’t itemize their deductions received no tax benefit for their charitable giving.
Congress has enacted changes to the charitable contribution deduction rules that will take effect over the next few years. These changes introduce a new floor on deductions and a limited deduction for those who don’t itemize.
Effective for tax years beginning after December 31, 2025, a new rule will change how the total amount of your charitable contribution deduction is calculated. Instead of being able to deduct the full amount of your contributions (subject to AGI limitations), your deduction will now be subject to a floor of 0.5% of your Adjusted Gross Income (AGI).
This means you can only deduct the amount of your contributions that exceeds this floor. The “contribution base” for this calculation is your AGI.
In a significant change, Congress has temporarily introduced a limited charitable contribution deduction for taxpayers who do not itemize. For tax years beginning after December 31, 2024, non-itemizers can claim a deduction for cash contributions of up to $300 for single filers and $600 for those filing a joint return.
This provision is set to be repealed for the 2029 tax year, but it offers a valuable opportunity for non-itemizers to receive a tax benefit for their charitable giving during this period.
To illustrate how the new 0.5% AGI floor will impact deductions starting in 2026, let’s look at a practical example.
Example:
Zachary made charitable contributions of $20,000 in 2026. His Adjusted Gross Income (AGI) for 2026 was $300,000.
Under the new rules, Zachary must first calculate the 0.5% AGI floor:
Next, he must subtract this floor from his total contributions to determine his deductible amount:
Therefore, after the new 0.5% AGI floor, Zachary may only claim a charitable contribution deduction of $18,500 on his 2026 tax return.
To learn more about how you can reduce your taxes and save money, check out the helpful resources on our blog or contact us today to schedule a consultation.
