OBBBA tax reform reshapes charitable giving

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, made several provisions from the 2017 Tax Cuts and Jobs Act (TCJA) permanent and introduced a series of new tax rules that take effect in 2026, reshaping the charitable giving landscape for individuals and families.

If you give to causes you care about, it's worth taking a fresh look at your strategy now. A few proactive steps before year-end can help you preserve tax advantages while supporting the nonprofits you care about, according to experts.

“Charitable planning is going to look different for every taxpayer,” says Karla Salinas, financial planner at BOK Financial®. "It depends on where you live, your income, marital status and life stage. The rules are changing, so it's a good time to check in with your advisor."

New charitable giving provisions
Several new provisions in OBBBA specify what tax benefits donors will receive, beginning in 2026.

1. Universal charitable deduction for non-itemizers
Starting in 2026, taxpayers who take the standard deduction can deduct up to $1,000 (single) or $2,000 (married filing jointly) in cash contributions to qualified public charities.

This is an above-the-line deduction, meaning non-itemizers can claim it.

2. Itemized charitable deduction floor
For those who itemize their deductions, charitable deductions will only be allowed after contributions exceeding 0.5% of their adjusted gross income (AGI). Donations below that threshold won't be deductible. This change may discourage smaller gifts from wealthier donors who itemize.

3. Cap on tax benefit for high-income donors
Beginning in 2026, the value of charitable deductions will be capped at 35% for taxpayers in the top tax bracket (37%). Previously, those in that bracket received $3,700 in benefits for every $10,000 donated. Under the new rule, that benefit drops to $3,500, a modest shift for small gifts but significant at scale.

"If a client is planning to make a major gift, it may make sense to do so in 2025," said Salinas. "The tax savings will be slightly better, and the organizations they support can put that money to work sooner."

4. Increased qualified charitable distribution (QCD) limit
The QCD limit for IRA owners aged 70½ or older will increase from $108,000 to $115,000 per person in 2026. The amount jumps to $216,000 for married couples if both people donate from their individual IRAs. QCDs can be a tax-efficient way to support charities while satisfying required minimum distributions.

5. SALT deduction temporarily expanded
The State and Local Tax (SALT) deduction cap increases from $10,000 to $40,000 beginning in the tax year 2025.

• This could lead to more taxpayers in states with high SALT to itemize, which may unlock additional charitable deduction opportunities.
• The cap will rise 1% annually through 2029 and return to $10,000 in 2030.
• The expanded deduction phases out for incomes over $500,000.

What OBBBA made permanent or extended from the 2017 TCJA
In addition to the new rules, OBBBA extends several TCJA provisions that affect charitable giving and tax planning.

1. Standard deduction: Now permanent and slightly higher
The higher standard deduction introduced by TCJA is now a permanent part of the tax code.

• Beginning in tax year 2025, the deduction increases to $15,000 for single filers and $30,000 for married couples filing jointly, indexed for inflation.
• While this simplifies filing, it also means fewer people may itemize, potentially reducing deduction-based charitable giving.

2. Income tax brackets locked in
The seven TCJA income tax brackets, 10%, 12%, 22%, 24%, 32%, 35% and 37%, are now permanent.

• These rates provide stability for long-term tax planning.

3. AGI limits on charitable deductions remain
Donors may continue to deduct up to 60% of AGI for cash contributions to public charities.

• This provision was set to expire but is now permanently extended.
• High-income donors making large gifts can still benefit from this flexibility.

4. Estate and gift tax exemption increased
Beginning in 2026, the federal estate and gift tax exemption increases to $15 million, adjusted annually for inflation.

• More than 99% of estates are expected to fall below the exemption threshold.

What to do before 2025 ends
Now is the time to review your giving strategy. Here are six ways to act this year to potentially maximize your benefits under the current rules, Salinas said.

• Lead with your giving goals.
  Decide what impact you want to make. Build your charitable budget first, then bring it to your tax professional.


• Consider bunching gifts into 2025.
  If your deductions typically fall short of the standard deduction, it might make financial sense to combine multiple years of donations into one tax year to itemize.


• Keep thorough records.
  Maintain receipts for cash, stock or non-cash gifts, especially if you plan to claim the new universal deduction in 2026. Ensure you're giving to 501(c)(3) public charities.


• Use the new deductions strategically.
  Don't assume deductions are automatic. Know your AGI, deduction limits and whether you'll benefit from itemizing.


• Accelerate large gifts.
  High-income donors may benefit by making larger contributions before the 35% deduction cap begins in 2026.


• Work with a tax professional.
  Your giving strategy should reflect your values and your tax reality. Work with a financial planner or certified public accountant (CPA) to evaluate your individual financial situation.

"Start the conversation with what matters to you most," recommended Salinas. "When clients begin with purpose, we can build a tax-smart giving plan around it, not the other way around."