By Tim Grant
Pittsburgh Post-Gazette
(TNS)
For years, people have faithfully dropped money into church collection plates, supported their favorite charities or helped fund local nonprofits—only to discover their donations didn’t save them a dime in federal income taxes.
Now, a new tax law is changing that.
Starting with the 2026 tax year, taxpayers who take the standard deduction can also claim a new deduction for qualifying charitable cash contributions—up to $1,000 for individuals and $2,000 for married couples filing jointly.
“Most of our clients weren’t itemizing,” said Howard Davis, president of Davis, Davis & Associates in the Strip District. “It’s good that now they will have it where people that still only use a standard deduction can deduct some of their charity.”
After a 2017 tax change dramatically increased the standard deduction, most taxpayers have opted not to itemize, meaning their charitable contributions gave them no direct tax benefit.
The new provision, part of the One Big Beautiful Bill Act, allows millions of Americans to get a tax break for giving to charity even if they take the standard deduction.
But there are limits: Only qualifying cash donations made directly to IRS-recognized charities count toward the new deduction.
Contributions of clothing, household goods, vehicles or other property do not qualify for this particular deduction. Likewise, contributions to donor-advised funds, supporting organizations, and many private foundations also are excluded from this new tax benefit.
“The new rule for non-itemizers is important for people to bear in mind as we approach the end of the year and people are considering charitable giving,” said Lucas Rihely, a partner at H2R CPA in Aliquippa.
“They should keep records and acknowledgements from charities because they may be eligible for a tax deduction that they have not had in recent years,” he said.
‘It’s changed the strategy’
Taxpayers who itemize their deductions rather than take the standard deduction will experience a squeeze on their charitable giving benefits.
The new law puts two limits on the tax benefits itemizers can claim—a floor that makes the first 0.5% of adjusted gross income in charitable contributions nondeductible, and a cap that reduces the value of deductions for taxpayers in the highest tax bracket.
Together, the changes mean some donors will get less of a tax break for their generosity.
“Itemizers now have a bit of a haircut [0.5%] of adjusted gross income for any charitable contributions,” said Elizabeth “Li” Connolly, a partner at Connolly Steele & Co. in Avalon.
“Very high income itemizers in the 37% tax bracket have additional limitations,” she said.
The cap doesn’t reduce the amount a high-income taxpayer can donate or necessarily the amount they can deduct.
It reduces the tax savings they receive for each dollar of charitable contributions they deduct. Under the new rules, taxpayers in the 37% tax bracket generally receive a tax benefit equivalent to a 35% rate on an itemized deduction rather than 37%.
For example, on a $10,000 deductible charitable contribution, that difference would mean $3,500 in federal tax savings instead of $3,700—a reduction of $200.
“For our clients, due to their high income levels, the law hasn’t changed their generosity. It’s changed the strategy,” said Jodi Amos, managing partner of 4 Rivers Wealth Management in Green Tree.
She said the deduction is now worth a bit less to her higher-income clients, so they need a different tax strategy.
”We’re being more intentional about bunching gifts, giving appreciated stock, and using IRA distributions for those over 70 and a half,” Amos said. “The generosity hasn’t changed. The planning around it has.”
Navigating the new rules
Pittsburgh has a long tradition of giving back. And changes to the tax code are unlikely to change that.
A 2010 comparison by Charity Navigator ranked the Pittsburgh region No. 1 among 30 large metropolitan areas for the financial health of its nonprofits.
The area’s largest charities had median donations of $4.5 million—$1 million above the national comparison average. Though the ranking is not a measure of how generously Pittsburgh households give today, it offers a glimpse of the region’s deep-rooted charitable culture.
J. Victor Conrad, owner of Pinnacle Financial Strategies in Pine, said he is helping clients navigate the new rules without significantly changing their charitable giving.
For higher-income clients, that can mean donating directly from IRAs, giving appreciated stock instead of cash or bunching several years of charitable contributions into a single tax year to maximize deductions.
“People still want to give out of the goodness of their heart,” Conrad said. “It’s my responsibility to help them optimize any potential tax benefit.”
Photo credit: krakenimages.com/Freepik
_______
© 2026 the Pittsburgh Post-Gazette. Visit www.post-gazette.com. Distributed by Tribune Content Agency LLC.
Sign in to get access to this free resource, and all of our whitepapers and reports.
Download this content today!
Register Now Already registered? Click here to Log In
