Blog

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.

Disclaimer: This content is provided for educational purposes only and is not legal, tax, accounting, or financial advice. Every situation is unique, so consult your own attorney, CPA, or financial advisor before making decisions based on this information.