Millions More Can Now Get Tax Breaks for Giving to the Poor
In a major change to the tax code, charitable donations may now reduce your tax bill, even if you take the standard deduction.
The above-the-line donation deduction applies to the 2026 tax year and beyond as part of President Donald Trump’s One Big Beautiful Bill. The provision allows those who claim the standard deduction — about 90% of all taxpayers — to also deduct from their cash contributions up to $1,000 for single filers and $2,000 for married couples filing jointly.
“This is one of the most meaningful changes to philanthropy in years, and it’s aimed squarely at everyday households,” said Will Kellar, managing partner at Human Investing, in an email.
Previously, only taxpayers who filed their taxes could write off charitable donations. Itemizers tend to be among the wealthiest Americans, meaning the charitable tax break was not an option for most taxpayers (although there was a brief period during the crisis when non-itemizers claimed a $300 deduction for charitable donations — a provision that expires in 2022.)
Kellar says: “For many years the tax laws favored the wealthy families who wrote and set aside others.”
As of this month, nearly 150 million Americans have just become eligible for subsidized a a break if they donate to charity — but the profits won’t happen automatically. Here’s what you need to know.
How to qualify for the new donation deduction
For many taxpayers who want the standard deduction, the key requirements for the new charitable tax break are that the donations need to be income-based, and the organization needs to be a qualified 501(c)(3) charity, according to Mitchell Kraus, a financial planner specializing in philanthropy at Capital Intelligence Advisors.
These rules mean you’ll want to rely on donations from the American Red Cross, churches or Habitat for Humanity rather than unions or think tanks. Another important note: Cash-based donations do not need to be dollar bills. They can take the form of bank transfers, card payments or checks.
The main output is goods and services, so the time spent in the soup kitchen will not be worth it. As well as goods donated to the Salvation Army.
When sending money, remember to keep good records. A paper trail, including a “written acknowledgment” from the donating organization, is important, Kraus said.
That way, you’ll easily be able to prove your deductions when the IRS comes knocking.
Kellar says: “Many families didn’t track their giving because it didn’t matter before. “Save receipts, keep affirmations and be intentional about how gifts are made. The bar isn’t high, but it’s real.”
There are some new charitable giving laws that affect inventors. (You can read more about them in this story.)
For taxpayers who take the standard deduction, however, they’re looking at a tax benefit worth hundreds of dollars depending on filing status and income bracket. For example, a single filer in the top 22% tax bracket who contributed $1,000 or more would get a $220 benefit, while a married couple in the 37% bracket who contributed at least $2,000 could get a $740 tax break.
Kellar says everyday donors give because they care, not because they want a tax break. But even so, he says, it’s good that they will finally be approved by the IRS.
“This law did not create generosity,” he said. “It fixed a blind spot.”
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