Charitable Giving in 2025 and 2026 under OBBBA

How Charitable Giving Rules Change in 2025 & 2026 under the One Big Beautiful Bill Act (OBBBA)

As the holidays approach, the season of giving has many people opening their pocketbooks- but how does this affect your taxes, especially under new rules introduced by the One Big Beautiful Bill Act (OBBBA)? For many, charitable giving can offer financial benefits through tax deductions, but if you’re planning on giving in the next year or two, timing and strategy matter more than ever. Below you’ll find answers to real-world questions donors ask to help you plan your charitable plan and your tax picture.

1. What is the new cash-gift limit to public charities under OBBBA?

If you itemize deductions in 2025, the widely used limit of donating up to 60 % of your adjusted gross income (AGI) in cash gifts to qualified public charities remains in place, and has been made permanent under OBBBA. Starting with tax years beginning January 1, 2026, that 60 % cap continues, but other changes (such as the new “floor” and benefit cap) begin to affect how much of your donation you can deduct or how much benefit you receive,

2. How has OBBBA changed charitable deductions for non-itemizers?

Under prior rules, only taxpayers who itemized could deduct charitable contributions. Starting in 2026, OBBBA introduces a new above-the-line deduction for donors who do not itemize: up to $1,000 for single filers or $2,000 for married filing jointly, applied to cash gifts to qualified public charities (subject to rules). For the 2025 tax year, however, the old rule still applies, meaning non-itemizers generally cannot deduct charitable gifts unless they itemize.

If you normally take the standard deduction and give smaller amounts, you may choose to wait until 2026 when this new non-itemizer deduction becomes available. But you’ll want to compare whether giving in 2025 vs giving in 2026 gets you more benefit.

3. What is the “0.5% AGI floor” on charitable deductions?

One of the key changes of OBBBA beginning in tax years 2026 onward: if you itemize your deductions, charitable contributions will only be deductible to the extent they exceed 0.5% of your AGI. This is particularly notable for high earners For example: if your AGI is $300,000, only the portion of your charitable giving in excess of $1,500 (0.5% of $300,000) will be deductible.

Smaller charitable gifts may lose tax-deductible status under this new floor. If you expect to itemize and you make gifts anyway, combining several years’ worth of giving into one year (bunching) may help you cross the floor threshold. Alternatively, if you’re planning a large cash gift and you expect to itemize, you can do so in 2025 because you’ll avoid some of the new restrictions coming in 2026. Or, you could also consider making your 2025 charitable contribution into a Donor Advised Fund to achieve the same outcome.

4. How are high-income donors impacted by OBBBA when giving to charity?

For donors in the highest tax brackets who itemize, OBBBA introduces a cap on the value of the tax benefit of charitable contributions. Beginning in 2026, the benefit per dollar donated (for itemizers in the top bracket) will be limited to about 35¢ of tax savings per dollar given, rather than the full 37¢ (or whatever marginal rate applies) under prior law.

For instance: one source estimates a donor with $1 million AGI donating $100,000 would see a tax benefit of approx. $37,000 under old rules, but only ~$33,250 under the new rules. Combined with the new AGI floor, if you fall into that category, accelerating major gifts into the 2025 tax year can help you maximize the deduction under the more generous rules.

5. How should I time my charitable giving between 2025 and 2026?

Timing is now a strategic component of charitable-giving planning. Because most of the “less-favorable” rules (floor, cap for high-income donors, etc.) take effect starting with tax years beginning Jan. 1, 2026, gifts made by December 31, 2025 will help maximize your deduction.

Conversely, donors who expect to take the standard deduction and give modest amounts may choose to give in 2026, when the new deduction for non-itemizers takes effect. Work with your tax advisor to model how your income, itemizing status, and giving strategy play out under each scenario and decide whether giving in 2025 or deferring to 2026 makes more sense for your personal situation.

6. How are donations of stocks or other non-cash assets affected by OBBBA?

Donating appreciated securities, real estate or other non-cash assets remains one of the more tax-efficient giving strategies. When done properly (to a qualified public charity), you may avoid capital gains tax and secure a fair-market-value deduction (subject to AGI limits). The OBBBA does not materially change those basic rules, but the timing and limits around itemizing make it more important to act with strategy. For example: since the floor and benefit cap for itemizers begin in 2026, making a non-cash gift in 2025 can yield better net tax results.

Ensure you obtain necessary documentation (e.g., IRS Form 8283 for non-cash gifts), verify charity status, check the applicable AGI limitation for non-cash gifts (typically lower than for cash gifts), and align with your overall tax plan.

7. What is a Qualified Charitable Distribution (QCD) and how does OBBBA impact it?

A Qualified Charitable Distribution (QCD) allows eligible IRA owners (typically age 70½ or older, depending on current rules) to direct up to $100,000 from their IRA directly to a qualified charity. The amount counts toward the required minimum distribution and is excluded from taxable income. The OBBBA does not change the basic mechanism of QCDs significantly, so this strategy remains viable in 2025. However, because itemizing rules will tighten in 2026, for donors who rely on the tax-benefit of charitable giving, a QCD can become an even more attractive giving vehicle.

If you are eligible and considering a QCD, coordinate with your advisor so that the transfer is completed by December 31 and aligns with your giving and tax objectives for 2025.

8. How are corporate charitable contributions limited under OBBBA?

For business-owner clients or corporations making charitable gifts, the OBBBA introduces a deduction “floor” beginning with tax years after December 31, 2025: corporations will only be able to deduct charitable contributions to the extent the aggregate contributions exceed 1% of taxable income for the year (and the gifts remain subject to the existing 10% cap

If your business is planning a charitable contribution, making it in the 2025 tax year rather than 2026 may yield a more favorable deduction profile. Coordinate personal and corporate giving strategy for best results.

Conclusion

The changes under OBBBA mean charitable-giving strategy now involves more nuance than ever. Donors (especially those who itemize) who are planning considerable donations may find more favorable tax benefits in 2025. Beginning in 2026, the new rules introduce floors, benefit caps for high-income donors, and a new deduction for non-itemizers. Whether you’re giving cash, appreciated assets, via an IRA, or through a business, timing and structuring matter.

For more OBBBA information, visit our dedicated OBBBA resource page.

If you’d like help building a tailored charitable-giving plan that aligns your financial goals, tax outlook, and philanthropic values, please connect with us online, or reach out to us directly at 1-770-495-9077 or email us at  [email protected].

The above article only intends to provide general financial information and is based on open-source facts, it is not designed to provide specific advice or recommendations for any individual. It does not give personalized tax, financial, or other business and professional advice. Before taking any form of action, you should consult a financial professional who understands your particular situation. CKH Group will not be held liable for any harm/errors/claims arising from the articles. Whilst every effort has been taken to ensure the accuracy of the contents, we will not be held accountable for any changes that are beyond our control.