The One Big Beautiful Bill Act passed in 2025 includes a few tweaks that could affect your 2026 charitable giving. If you itemize deductions, two modest changes – a small “floor” and a slight “haircut” – may affect how much of your giving actually offsets your tax bill. The new law makes a couple of changes to how charitable giving works, and while they’re not dramatic, it’s helpful to understand how they play out.
The first change is a small floor on charitable deductions. In practice, it just means that the first 0.5 percent of your adjusted gross income (AGI) won’t be deductible. So, if your AGI in 2026 is $150,000, the first $750 of your giving simply won’t reduce your taxable income.
The second change is a haircut (also referred to as a deduction reduction) on itemized deductions. If you’re in the 37 percent bracket, the value of your deductions is capped so they only reduce your tax at a 35 percent rate. If your other deductions – things like mortgage interest, certain medical expenses, or state and local taxes – stay about the same from year to year, you’ll likely feel the effect of this haircut most clearly in your charitable giving. For example, if you had $100,000 of deductions in the 37 percent bracket, the haircut trims $2,000 off the tax benefit you would have received in 2025.
These adjustments aren’t huge, but they do shift the landscape a bit. There’s a silver lining, though: The revenue from these changes can be seen as helping pay for something else in the new tax law. Non itemizers now get their own charitable deduction ($1,000 for individuals and $2,000 for joint filers), even while taking the standard deduction. That means more people can participate in the tax benefits of giving, and in a way, your slightly reduced benefit is encouraging others to join in charitable giving.
And it’s worth remembering that the law also kept the top tax rate from rising from 37 percent to 39.6 percent. Everyone’s situation is a little different, of course, but it’s entirely possible that your 2026 tax bill, even with the new floor and haircut, ends up lower than it otherwise would have been.
