When the One Big Beautiful Bill Act became law last summer, the team at the Catholic Community Foundation of Minnesota (CCF) got to work. We wanted to see how the new rules might affect our donors. The first changes to charitable giving deductions take effect for the 2026 tax year.
Below, we outline what the new law may mean for you.
For Donors Who Itemize Deductions
Caps Tax Benefit for Top Earners — If you’re a donor in the highest tax bracket (37%), you can now get only a 35% tax benefit from itemizing deductions (down from 37%). Example: A $10,000 charitable gift would lower your taxes by $3,500 instead of $3,700.
New 0.5% Minimum for Charitable Deductions — Charitable gifts can be deducted only if they exceed 0.5% of your adjusted gross income (AGI). This means that the first 0.5% of your giving does not count toward a tax benefit. This change is small and mostly affects wealthier donors.
Permanent 60% Limit for Cash Gifts — You can now always deduct cash gifts up to 60% of your AGI (previously 50%). This helps donors who give large amounts in cash each year.
For Donors Who Do Not Itemize Deductions
New Permanent Deduction — Even if you don’t itemize, you now have a charitable deduction available: up to $1,000 for individual filers or up to $2,000 for joint filers. This deduction is for cash gifts, so these contributions cannot be made from appreciated assets.
NOTE: Gifts to donor advised funds do not qualify.
Makes Permanent the Increased Standard Deduction — And, it will continue to increase slightly each year with inflation. In 2026, it will be $16,100 for single filers or $32,200 for joint filers.
This makes giving strategies like bunching (giving several years of donations in one year) more helpful if you want your deductions to exceed the standard deduction.
For Estate Giving
Permanently Increases the Estate and Gift Tax Exemption — The amount you can pass on tax free through your estate or gift during your lifetime is now $15 million for individuals or $30 million for married couples.
These amounts will go up over time with inflation. This means fewer families will pay estate taxes, so fewer people will need to include charitable gifts in their estates solely for tax reasons.
Temporary Changes to State and Local Tax (SALT) Deductions
Higher SALT Cap (2025-2029) — The cap on state and local tax deductions increased to $40,000 in 2025 (up from $10,000). The cap increases by 1% each year, so for 2026, it will be $40,400. So, while the standard deduction is higher, this may help more people benefit from itemizing their deductions.
Tax Incentives: Only One Piece of the Puzzle
While the OBBB Act changes some tax benefits, the impact on donors is minimal. At CCF, we know you don’t give to charitable causes only because of the tax incentives. You give out of a spiritual need, responding to the call to share God’s blessings with others.
If you’d like to learn how these changes may affect your own giving, contact the team at CCF. We are here to help you make the most of your charitable goals — and accompany you on your sacred journey in generosity
The information presented above by the Catholic Community Foundation of Minnesota (CCF) is general and educational in nature. CCF and its staff do not provide individualized legal or tax advice. We recommend you consult with your attorney or tax professional regarding your unique personal situation.