The New Tax Law: What It Means for Your Giving Plans

As of July 4th, we have a new tax law officially named the One Big Beautiful Bill Act (OBBBA). While the law primarily addresses broad tax policy, a few key provisions may influence charitable giving—particularly when it comes to planned and estate gifts. The good news? Most donors will see little change, and the tools to leave a lasting legacy remain fully intact.

• As of the 2025 tax year, the SALT (State and Local Tax) deduction cap has increased to $40,000 for donors earning $500,000 or less (with a phased down cap at $500,000-$600,000), and both the cap and income threshold will increase by 1% annually until 2030, when it will revert back to $10,000.

What’s Changing (and What Isn’t)

Starting in 2026, a few rules take effect:

• The SALT (State and Local Tax) deduction cap has increased to $40,000 for donors earning $500,000 or less (with a phased down cap at $500,000-$600,000), and both the cap and income threshold will increase by 1% annually until 2030, when it will revert back to $10,000.
• High-income donors (those in the top tax bracket) will see a slight reduction in the value of their charitable deductions: $0.35 in tax benefit per dollar donated instead of $0.37. This change impacts less than 1% of taxpayers and is unlikely to affect most giving decisions.
• A new “floor” for charitable deductions means only gifts above 0.5% of your income will be deductible. For example, if you earn $200,000, the first $1,000 of giving won’t count as a deduction. This change is minor for most households.
• The 60% of AGI limit for cash gifts is now permanent—allowing donors to deduct more of their charitable giving in high-contribution years.

For Non-Itemizers: A Modest New Deduction

Most Americans don’t itemize deductions. Starting in 2026, the OBBBA allows non-itemizers to deduct up to $1,000 in charitable contributions—or $2,000 for joint filers. This does not apply to gifts to donor-advised funds, but it does apply to gifts made directly to charitable organizations.

While this deduction is small, it recognizes and rewards the generosity of everyday givers. Combined with the permanently increased standard deduction—about $31,500 for couples and $15,750 for individuals in 2026—it gives more donors a small incentive to give generously, even if they don’t itemize.

Legacy Giving Remains a Smart Strategy

The OBBBA also locks in a higher estate and gift tax exemption—estimated at $15 million per person ($30 million for couples). That means fewer estates will owe federal estate taxes. Still, charitable estate planning offers powerful benefits. For example, naming a charity as a beneficiary of your retirement account remains one of the most tax-wise ways to give.

Your Legacy Still Matters

The tax law may change—but your impact doesn’t. Donors give because they believe in something greater than themselves. If you're considering a planned gift or want help navigating the new rules, we're here to support you. Let’s create a legacy that reflects your values—and changes lives.