Section 70424 of the One Big Beautiful Bill Act introduced a new 0.5%-of-AGI floor on itemized charitable contribution deductions, beginning with tax years after December 31, 2025. Section 70425 introduced a 1%-of-taxable-income floor for corporate charitable contributions. Section 70423 reinstated and made permanent a $1,000 single / $2,000 joint above-the-line charitable deduction for non-itemizers. Combined with the new 2/37ths itemized-deduction haircut for filers in the 37% bracket under §70111 ³, the charitable deduction landscape for 2026 is materially different from anything we've seen since 1986.
For our high-net-worth and family-foundation clients, the 0.5% floor combined with the 2/37ths haircut creates a "double whammy" that significantly reduces the after-tax value of large charitable gifts. The planning response: bunching, donor-advised funds, and Qualified Charitable Distributions.
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