House Resolution 1 (H.R. 1), the One Big Beautiful Bill Act (OBBBA), changed how charitable contributions can be deducted starting with the 2026 tax year. Some donors will see new benefits. Others, especially those who itemize, will find their gifts produce a little less tax savings than before.

The good news is that several giving strategies remain highly tax efficient, and a few have become even more valuable. Here is what changed, and how you can continue to support your favorite charity in the smartest way possible.

How Charitable Deductions Worked Before OBBBA

Previously, if you itemized your deductions, you received a dollar-for-dollar deduction for every dollar you gave to a qualified charity. The main limitation was a cap based on your adjusted gross income (AGI). Cash gifts to public charities could be deducted up to 60 percent of AGI, and any amount above that limit carried forward to future tax years.

How Charitable Deductions Work Now

Under OBBBA, four important changes now apply.

1. A New Deduction for Donors Who Do Not Itemize

If you take the standard deduction, single filers can now deduct up to $1,000 in cash gifts to qualified charities, or up to $2,000 for married couples filing jointly. This is a meaningful change, since most taxpayers have not been able to deduct their giving in recent years.

For Ohio taxpayers, this is both a federal and a state tax deduction, as the State of Ohio begins with federal adjusted gross income (AGI) in its tax calculation.

Keep in mind that gifts to donor-advised funds (DAFs) and private foundations do not qualify for this deduction; gifts made directly to public charities do.

2. A 0.5 Percent Floor for Donors Who Itemize

If you itemize, only the portion of your charitable giving that exceeds 0.5 percent of your AGI is now deductible.

For example, a donor with an AGI of $200,000 has a floor of $1,000. If that donor gives $10,000 during the year, only $9,000 generates a tax deduction.

Ohio taxpayers should also note that Ohio does not recognize itemized deductions. Itemized charitable gifts reduce your federal tax, but they do not provide a state tax benefit.

3. A 35 Percent Cap for the Highest Tax Bracket

Taxpayers in the top 37 percent federal bracket now receive a maximum tax benefit of 35 percent on their charitable deductions, rather than the full 37 percent. On a $20,000 gift, that difference works out to roughly $400 in lost tax savings.

4. Permanent Limits Based on Income

The annual limits on cash contributions are now permanent:

• Up to 60 percent of AGI for cash gifts to public charities and donor-advised funds
• Up to 30 percent of AGI for cash gifts to private foundations

Your Donor-Advised Fund Can Still Make an Impact

Even with these new limits, many donors still hold substantial balances in donor-advised funds (DAF) from contributions made in prior years.

You likely received the tax deduction for those contributions when you made them. But until those dollars are granted out, they have not yet reached the charities they were meant to support. A grant recommendation from your DAF is one of the simplest ways to put that money to work right now, with no new tax calculations required.

Gifts of Appreciated Stock Remain the Most Tax-Efficient Option

Donating stock or other securities that have grown in value is still one of the most tax-efficient ways to give. When you donate appreciated stock, you have held for more than one year:

• You can deduct the full fair market value of the shares, subject to the new 0.5 percent floor.
• The appreciation escapes income tax entirely.

Suppose you bought shares for $5,000 that are now worth $20,000. If you sell them and donate the cash, you owe tax on a $15,000 gain. If you donate the shares directly, you avoid that tax and still receive a deduction for the full $20,000.

Gifts of appreciated stock to public charities can be deducted up to 30 percent of AGI each year.

Qualified Charitable Distributions from Your IRA

If you are age 70.5 or older, you can direct up to $111,000 per year (the 2026 limit) from your IRA straight to a qualified charity through a qualified charitable distribution (QCD). For donors who are required to take minimum distributions, a QCD counts toward that requirement.

QCDs offer advantages that outright gifts no longer do:

• They are excluded from AGI. Because the distribution never counts as income, it is not subject to the 0.5 percent floor or the 35 percent cap.
• They reduce Ohio income tax. Ohio begins its tax calculation with federal AGI, so a QCD lowers your state tax as well as your federal tax.
• They double for couples. If both spouses are age 70.5 or older, each can give up to $111,000 from their own IRA, for a combined total of up to $222,000.

QCDs must be paid directly from the IRA to the charity, and they cannot be made to donor-advised funds or private foundations. Contact your IRA custodian to set one up before year-end.

Plan Your 2026 Gift

The right giving strategy depends on whether you itemize, your income, the assets you hold and your age. Before you make a year-end gift, it is worth reviewing your options with a tax advisor.

The Zinner & Co. Tax Team helps individuals and families in Northeast Ohio plan charitable giving that fits their broader tax picture. Contact Zinner & Co. today.