Charitable Deductions Under the New Tax Law: What's Changed and What Hasn't
ByIf you’re a business owner or leader who gives regularly, there’s a good chance you may be wondering if charitable giving deductions are still as valuable anymore following the enactment of the One Big Beautiful Bill Act last July.
The short answer is charitable giving is still very much tax‑advantaged. Yes, the tax law has changed. And yes, there are new rules to understand. But for most people, the actual impact on their charitable deduction is far less than may be feared. In this first part of a two-part series, we will clearly identify what has changed and what remains the same.
What Changed
Beginning in 2026, new tax legislation introduces a floor on charitable deductions for taxpayers who itemize. Under this rule, each year the first 0.5% of your adjusted gross income (AGI) given to charity is no longer deductible.
For example, if your AGI is $500,000, the first $2,500 of charitable contributions would not be deductible. Everything above that amount remains deductible.
For many people, that ‘lost’ deduction represents a very small portion of their overall giving. It’s not nothing, but it’s also not a reason to scrap a thoughtful charitable strategy.
Just a reminder, as before, this rule primarily affects taxpayers who itemize deductions; those taking the standard deduction may not see a direct change.
What Hasn’t Changed
Charitable contributions are still deductible for itemizers. Existing AGI limits still apply. Excess contributions can still be carried forward. Planning still matters and still works.
This isn’t a charitable giving problem. It’s a planning conversation, and one your Kernutt Stokes tax advisor can help you navigate.
In Part 2 of this series, we discuss charitable planning strategies to help you continue giving in a tax‑efficient way under the new rules.
Additional KS Advisor Resources
KS Advisor Video: Tax Deductions
KS Advisor Blog: Navigating 2026 Tax Strategies for 5 Key Oregon Industries