Taxpayers who donate to the causes that are close to their hearts have a new reason to celebrate — and to give: The massive new tax law includes a valuable new tax deduction for qualified charitable contributions, worth up to $1,000 for single filers and $2,000 for married filing jointly taxpayers, starting in 2026.
And here’s what’s surprising about this new tax benefit: It’s available to taxpayers who claim the standard deduction — you don’t have to itemize. That could be a big boon for taxpayers who like to support the causes that are important to them. With some minor exceptions in years past, claiming the charitable contribution tax deduction generally has required that taxpayers itemize their deductions.
Because the Tax Cuts and Jobs Act of 2017 nearly doubled the standard deduction, about 90 percent of taxpayers now claim the standard deduction rather than itemizing, which, until now, has meant forfeiting any tax benefit for charitable giving.
Remember, taxpayers always must choose between claiming the standard deduction and itemizing — you want to choose whichever is larger. But there are a handful of so-called above-the-line deductions that you can claim along with the standard deduction, and this new tax perk is about to join that list.
Another interesting feature of this new tax benefit: While many of the tax breaks in the new law are temporary, this above-the-line deduction for charitable contributions is permanent (that is, to the degree that any tax provision is permanent; lawmakers do have a penchant for changing tax laws). Starting with your 2026 tax return, which you’ll file in 2027, you’ll be able to claim this tax deduction, even if you don’t itemize.
There is one important caveat: Donations to donor-advised funds don’t qualify for this new tax break, according to Deloitte Tax LLP, a global accounting and consulting firm.
Learn more: There’s a new tax break worth $6,000 for older taxpayers — here’s who qualifies
The charitable contribution tax deduction today is more restrictive
Before the new law goes into effect — that means for tax year 2025 — the only way to secure a tax benefit for making a charitable contribution is to itemize your deductions. And that means it has generally been wealthier taxpayers who enjoy a federal tax benefit for their charitable contributions.
Check out this data from 2020 from a report by the Tax Policy Center, a nonpartisan, nonprofit research organization:
64 percent of tax returns that reported adjusted gross income (AGI) of $500,000 or more claimed itemized deductions
11 percent of returns with $50,000 to $100,000 of AGI claimed itemized deductions
2 percent of tax returns with less than $30,000 in AGI claimed itemized deductions
You may remember there was a time, briefly, when you could claim a tax deduction for your charitable donations even if you didn’t itemize: The 2020 Coronavirus Aid, Relief and Economic Security (CARES) Act included an above-the-line tax deduction for charitable giving worth $300 (a $600 tax break for married filing jointly filers was added for 2021). But that popular tax break existed only for 2020 and 2021.
The new tax law seems to recognize that getting a tax break for giving to causes — without having to itemize — helps out middle- and lower-income taxpayers. This new tax deduction could benefit U.S. taxpayers and possibly the charities to which they donate, because it may at least somewhat reverse what happened after the Tax Cuts and Jobs Act (TCJA) went into effect in 2018. The TCJA nearly doubled the standard deduction, which made it much less beneficial for people to itemize their deductions.
In 2018, about 23 million taxpayers switched from itemizing to claiming the standard deduction, and those taxpayers donated about $880 less, on average, than they otherwise would have that year, according to a 2024 paper by the National Bureau of Economic Research, a private, nonprofit research organization. Overall, the TCJA “decreased charitable giving by about $20 billion annually,” the paper says.
Still, other data suggests that, after the initial drop, charitable donations increased in later years — though that rise in giving was likely concentrated among wealthy people who still find it beneficial to itemize their deductions, according to a report by the Bipartisan Policy Center, a not-for-profit, nonpartisan research organization.
The TCJA, the Center said, may have concentrated “tax incentives for charitable giving more among the wealthy.”
Learn more: These 9 states have no income tax — that doesn’t always mean you’ll save money
