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If your construction company donates to charity each year, be mindful that the OBBBA adds a new rule starting 2026 that could shrink your deductions.

If your construction company donates to charity each year, be mindful that the OBBBA adds a new rule starting 2026 that could shrink your deductions.

More specifically, C corporations will face a new 1% “floor” on charitable deductions.

For example:If your company earns $1,000,000 and donates $10,100 in 2026:

1% floor = $10,000

Only $100 is deductible.

Anything under that 1%?❌ No deduction❌ No carryover❌ Gone

The old 10% ceiling still applies—but now deductions only count for amounts between the 1% floor and the 10% ceiling.

Since the floor doesn’t start until 2026, consider making planned charitable contributions in 2025 to secure the full deduction.

Note

This change applies to C corps only.S corps and partnerships pass contributions to owners, who will face their own floors starting in 2026.