Back to today’s briefing

Story perspectives

OBBBA Alters Tax Deductions, Sparks Charitable Donation Surge

11/14/2025

40 8 Full Breakdown

Summary

Tax Law Changes

The One Big Beautiful Bill Act (OBBBA) will limit itemized deductions for high-income taxpayers starting in 2026.
It also creates an above-the-line deduction for non-itemizers of $1,000 for charitable donations.
The change may prompt frontloading of donations as taxpayers react before the rules take effect.
The District of Columbia and other states are adjusting, with some decoupling from federal provisions to protect revenue.

Summary

Governors Address Budget Shortfalls

Rhode Island Governor Dan McKee unveiled a budget with a $29.2 million revenue increase from personal and estate taxes, but a $300 million deficit looms and cuts could affect it.
Kentucky faces a $305 million budget shortfall from tax cuts and a slowing economy, prompting lawmakers to consider a windfall tax on the wealthy to fund essential services.
Connecticut's tax receipts could prompt tax-cut discussions and human-service investments.

History

Historical Context

The Tax Cuts and Jobs Act of 2017, signed by President Donald Trump, marked a significant overhaul of the U.S. tax system, reducing the corporate tax rate from 35% to 21% and eliminating personal exemptions. By 2025, the One Big Beautiful Bill Act extended many provisions of the TCJA, including a $1,000 deduction for charitable donations, amid ongoing debates about its impact on income inequality and fiscal policy.

1 of 3

Tax Law Changes

The One Big Beautiful Bill Act (OBBBA) will limit itemized deductions for high-income taxpayers starting in 2026.
It also creates an above-the-line deduction for non-itemizers of $1,000 for charitable donations.
The change may prompt frontloading of donations as taxpayers react before the rules take effect.
The District of Columbia and other states are adjusting, with some decoupling from federal provisions to protect revenue.

1 / 3