Details of Public Law 119-21, section 70425 , One Big Beautiful Bill Act

This provision adds a floor limitation for charitable contributions made by an individual. This provision additionally limits the charitable contribution deduction to the extent the contribution exceeds 0.5 percent of an individual’s contribution base, generally adjusted gross income (AGI) computed without regard to net operating loss carrybacks, for the taxable year. In addition, this provision provides rules for the order in which the individual’s contributions are taken into account.

This provision also provides in years in which contributions exceed a charitable deduction limitation the deduction disallowed by the 0.5 percent floor may be carried forward for the succeeding 5 taxable years, subject to limitations.

This provision makes permanent 60 percent cash charitable contribution celling to charities for taxable years beginning after December 31, 2017, which was to sunset after 2025. It also modifies the limitation to allow cash contribution payments made to charities to the extent the contributions do not exceed the excess of 60 percent of the individual’s contributions for the taxable year over the aggregate amount of contributions over such year.

California generally conforms, under the PITL, to the federal charitable contribution rules under IRC section 170 as of the specified date of January 1, 2025, with modifications, and as a result, does not conform to the changes made by this provision.

The estimated revenue impact to conform to the above provisions would result in the following gain:

26/27 27/28 28/29 29/30 $340,000,000 $310,000,000 $320,000,000 $330,000,000