$1,000 Charity Donation Deduction in the 2025 Trump Tax Law

Many charities advertise that donations are tax-deductible, but most people don’t deduct donations on their taxes. That’s because over 80% of taxpayers use the standard deduction, and they don’t get to deduct donations to charities when they don’t itemize. People donate because they support the cause, whether they get a tax deduction or not.

I’m in the 80%. I don’t track my donations because I know I won’t deduct them.

This will change in 2026.

New Deduction When You Don’t Itemize

Some of you may recall that Congress allowed people who don’t itemize deductions to still deduct a small amount of their charitable donations during COVID. It was originally a one-off $300 deduction in 2020 (see CARES Act 2020 Charity Donation Deduction: $300 or $600 for Married?). Congress re-created it with some tweaks as another one-off for 2021 (see 2021 $300 Charity Deduction When You Don’t Itemize).

The new 2025 Trump tax law resurrected the 2021 version and raised the allowed amount from $300 to $1,000 ($2,000 for married filing jointly). It’ll be ongoing this time, starting in 2026 (not 2025), with no preset end date.

All the other terms from 2021 are carried over to this new iteration. This deduction is only for people who take the standard deduction. The donations must be in cash, not necessarily physical cash, but not in household items, cars, stocks, bonds, mutual funds, ETFs, or crypto. Checks, card payments, and bank debits are all OK. The donations must be made directly to charities, not to a donor-advised fund.

There’s no income limit or phaseout. All other requirements about charity donations still apply, including getting a written acknowledgment with all the required elements.

Some places reported that this deduction is “above the line.” It’s not true. This new deduction doesn’t lower your AGI. It doesn’t make it easier for you to qualify for other tax breaks. It doesn’t affect state taxes.

Lower Deduction When You Itemize

If you itemize deductions, this new $1,000/$2,000 deduction isn’t available to you. You’ll continue to include your charity donations as itemized deductions on Schedule A. However, the new 2025 Trump tax law adds a floor for your charitable contributions deduction at 0.5% of your AGI, also starting in 2026 (not 2025), with no preset end date.

This floor is similar to how the medical expenses deduction has a floor at 7.5% of AGI. It reduces the amount you can deduct by 0.5% of your AGI. For example, suppose your AGI is $100,000. 0.5% of $100,000 is $500. After this change goes into effect in 2026, when your total donations to charities add up to $4,000, you can deduct only $3,500 as an itemized deduction.

Accelerating your planned donations in future years to 2025 will avoid having your deduction reduced by 0.5% of AGI each year.

QCD

The new 2025 Trump tax law didn’t make any changes to Qualified Charitable Distributions (QCDs).

If you’re over 70-1/2, QCDs out of a Traditional IRA continue to be the best way to donate to charities. QCDs count toward the RMD, but they don’t raise your AGI. You don’t have to itemize to make QCDs. Nor are you required to reduce the amount by 0.5% of AGI. The annual limit for QCDs is 100 times higher than this new $1,000/$2,000 deduction for people who don’t itemize. It’s too bad that only those 70-1/2 and older can do QCDs.

The only thing is that QCDs can’t go to a donor-advised fund. If you ask the IRA custodian to make payments to the charities, they’ll show a total as QCDs on the year-end 1099 form. Do them early in the year before you take any other distributions out of the Traditional IRA, including Roth conversions. Make sure the charities cash the checks before December 31.

You can also write checks from your IRA and send them to charities yourself, but your IRA custodian won’t know which checks you wrote are QCDs. They won’t be able to indicate them as such on the 1099 form. You’ll have to keep track of them yourself and report what amount from the total distributions on the 1099 form was QCD.

Naturally, because QCDs are excluded from your income to begin with, you can’t deduct QCDs again either toward this new $1,000/$2,000 deduction when you don’t itemize or as a part of the itemized deductions.