New Limitations On Charitable Deductions Take Effect In 2026

Among the tax provisions of the One Big Beautiful Bill Act (OBBBA), which was signed into law on July 4, 2025, are new limitations on charitable contribution deductions for individuals and corporations. For tax years starting after Dec. 31, 2025, the OBBBA creates new floors for charitable contribution deductions. In the case of individual taxpayers, charitable contributions are deductible only to the extent the aggregate contributions exceed 0.5% of the taxpayer's "contribution base" (i.e., the taxpayer's adjusted gross income computed without regard to any net operating loss carryback for the tax year) for the taxable year.

In the case of corporate taxpayers, charitable contributions are deductible only to the extent they exceed 1% of the corporation's taxable income for the taxable year and do not exceed 10% of the corporation's taxable income for the taxable year.