Who Benefits From This Change
Roughly 85% of U.S. taxpayers take the standard deduction. Under prior law, those filers received zero tax benefit from charitable giving. OBBBA created IRC §170(p) to change that, effective for tax years beginning after December 31, 2025.
If you're in the 22% bracket and donate $1,000 to a qualifying charity, this deduction saves you $220. Married couples donating $2,000 at the same bracket save $440.
What Qualifies Under IRC §170(p)
The deduction covers only cash donations to qualifying public charities. Non-cash contributions (stock, property, clothing) do not qualify for this above-the-line treatment.
Eligible contributions:
- Cash, check, credit card, or electronic payment
- Payroll deductions to qualifying organizations
- Donations to churches, schools, hospitals, and most public charities under IRC §170(c)
Excluded from this deduction:
- Donor-advised funds (DAFs)
- Private non-operating foundations
- Supporting organizations under IRC §509(a)(3)
- Non-cash donations of any kind
- Excess amounts (no carryforward to future years)
Before and After OBBBA
Documentation Requirements
For any single donation of $250 or more, you need a contemporaneous written acknowledgment from the charity. For smaller cash gifts, keep bank statements, canceled checks, or credit card receipts.
No receipt means no deduction. Get confirmation before you file.
What About Itemizers?
If you itemize, nothing changes. You continue deducting charitable contributions under the standard §170 rules, subject to AGI percentage limits (generally 60% for cash gifts to public charities). The §170(p) non-itemizer deduction is only available to filers who take the standard deduction.
Planning Considerations
Check your itemized total first. The §170(p) deduction adds to your standard deduction rather than replacing it. If your itemized deductions are close to the standard deduction threshold, compare both options carefully.
DAF bunching still works for itemizers. Donor-advised funds remain a powerful vehicle for consolidating multiple years of giving into one large deduction. The fact that DAF contributions don't qualify for §170(p) doesn't change their value for taxpayers who itemize.
Non-cash donations still require itemizing. Donating appreciated stock or real property only generates a deduction if you itemize. The §170(p) deduction does not help with non-cash gifts.
For help incorporating this change into your tax strategy, contact TS CPA.