All taxpayers needs to be conscious {that a} new model of the non-itemized charitable tax deduction that had surfaced (and disappeared) because the “common charitable tax deduction” lately has been introduced again from extinction and even enhanced. This highly regarded deduction returns for years after 2025 (i.e. beginning for the 2026 tax 12 months) and has no outlined expiration date this time. On this article, we’ll cowl the fundamentals on this deduction, what it’s, its historical past, why it’s now not “common”, the brand new most per 12 months that may be deducted, and why it was (and will likely be) so fashionable.
What’s the “Non-Itemized Charitable Donation Tax Deduction”?
The “non-itemized charitable donation tax deduction”, previously also known as the “common charitable tax deduction” is exclusive in that even tax filers that declare the usual deduction might declare it, versus solely those who itemized tax deductions. It was first carried out in COVID reduction laws and has been restored and expanded in Part 70424 of the “One Massive Stunning Invoice Act” (OBBBA) laws for tax years after 2025. Not like the prior iteration, nevertheless, it’s now not 100% common (extra on that in a bit).
The non-itemized charitable donation deduction is “above-the-line”, which means that it reduces taxable revenue.
What Varieties of Contributions Are Eligible for a Non-Itemized Deduction?
Notice that with the intention to be deductible, the charitable contribution should be money (or equal, akin to examine or bank card), and it should be made to a public (501(c)3)) charity (which you’ll be able to affirm utilizing the IRS’s Tax Exempt Group Search device). Donations to personal foundations and donor-advised funds aren’t eligible for non-itemized deductions. And items of securities, property, or providers (e.g. time) are additionally not eligible for non-itemized deductions.
How A lot is the Most Non-Itemized Charitable Tax Deduction in 2026?
When it returns in 2026, the utmost non-itemized charitable tax deduction will likely be both $1,000 or $2,000, relying on submitting standing, as Part 70424 of the OBBBA states:
This part makes everlasting and will increase to $1,000 for single filers (from $300) or $2,000 for joint filers (from $600 for joint filers) the tax deduction for charitable contributions made by people who don’t itemize their federal revenue tax deductions.
Notice that “Married Submitting Individually” and “Head of Family” filers have the identical $1,000 most deduction as “Single” filers. So, the utmost non-itemized charitable tax deductions are:
- Single, Head of Family, Married Submitting Individually: $1,000
- Married Submitting Collectively: $2,000
What Documentation is Wanted for the Non-Itemized Charitable Deduction?
Ask for and maintain onto charitable donation receipts if you don’t routinely obtain one on the time of donation. If audited, you’ll need to current this for donations over $250 to confirm your donation declare.
The Quick Historical past of the “Common Charitable Tax Deduction”
The historical past behind the common charitable donation tax deduction could be very fascinating. It was created as part of the CARES Act (the primary COVID reduction invoice in 2020). It was distinctive in that it allowed each taxpayer to deduct as much as $300 in money donations – whether or not they itemized or claimed the usual deduction. The 2nd COVID reduction invoice, the American Rescue Plan Act of 2021, elevated the utmost common donation deduction quantity to $600 for “married submitting collectively”. It additionally set an elevated cap of $300 (up from $150) for “married submitting individually” filers.
Sadly, the common charitable donation tax deduction was not renewed after 2021, regardless of overwhelming reputation. In keeping with the IRS, within the 2021 tax 12 months, roughly 48 million households claimed the short-term common charitable deduction, leading to round $18 billion in further charitable donations.
Why was the deduction so fashionable? The 2017 “Tax Cuts and Jobs Act” (TCJA) doubled the usual deduction and since then over 90% of taxpayers declare the usual deduction (as a substitute of submitting an itemized tax return), up from about 60% previous to the TCJA reform. Sadly for charities, charitable donations might beforehand solely be claimed on itemized tax returns. In 2018, the primary 12 months publish tax-reform, 14.8 million returns claimed a charitable deduction, in line with the IRS. This was down from 37.9 million the 12 months prior, a 61% decline, which was predictably catastrophic for charitable donations.
Bringing again and increasing the charitable tax deduction for traditional deduction filers will hopefully assist increase donations to charitable organizations near pre-tax reform ranges.
Why is the Non-Itemized Charitable Tax Deduction No Longer “Common”? The New 0.5% Rule
In its earlier iteration, the non-itemized charitable deduction was “common”, however that’s now not the case. Why? The OBBBA additionally created a brand new 0.5% AGI flooring rule for itemized charitable deductions that additionally begins in 2026. Which means that solely these charitable contribution quantities which can be above 0.5% of a filer’s adjusted gross revenue (AGI) are eligible for a deduction. So, technically, the non-itemized charitable deduction is just for customary deduction filers – and just for money donations to public charities.
Itemized charitable deductions are eligible for a deduction as properly, supplied they meet eligibility standards and are above the brand new 0.5% of AGI flooring.
Getting Strategic About your Donations
If you happen to declare the usual deduction in your taxes and are planning to donate this 12 months at ranges beneath the utmost non-itemized charitable deduction listed above – it may very well be a superb transfer to attend till Jan 1, 2026 to make this 12 months’s donation. That may can help you declare the deduction, whereas a deduction in 2025 wouldn’t qualify.
