(a) In general.—
(1) IN GENERAL.—Paragraph (1) of section 170(b) is amended by adding at the end the following new subparagraph:
“(I) 0.5-PERCENT FLOOR.—Any charitable contribution otherwise allowable (without regard to this subparagraph) as a deduction under this section shall be allowed only to the extent that the aggregate of such contributions exceeds 0.5 percent of the taxpayer’s contribution base for the taxable year. The preceding sentence shall be applied—
“(i) first, by taking into account charitable contributions to which subparagraph (D) applies to the extent thereof,
“(ii) second, by taking into account charitable contributions to which subparagraph (C) applies to the extent thereof,
“(iii) third, by taking into account charitable contributions to which subparagraph (B) applies to the extent thereof,
“(iv) fourth, by taking into account charitable contributions to which subparagraph (E) applies to the extent thereof,
“(v) fifth, by taking into account charitable contributions to which subparagraph (A) applies to the extent thereof, and
“(vi) sixth, by taking into account charitable contributions to which subparagraph (G) applies to the extent thereof.”.
(2) APPLICATION OF CARRYFORWARD.—Paragraph (1) of section 170(d) is amended by adding at the end the following new subparagraph:
“(C) CONTRIBUTIONS DISALLOWED BY 0.5-PERCENT FLOOR CARRIED FORWARD ONLY FROM YEARS IN WHICH LIMITATION IS EXCEEDED.—
“(i) IN GENERAL.—In the case of any taxable year from which an excess is carried forward (determined without regard to this subparagraph) under any carryover rule, the applicable carryover rule shall be applied by increasing the excess determined under such applicable carryover rule for the contribution year (before the application of subparagraph (B)) by the amount attributable to the charitable contributions to which such rule applies which is not allowed as a deduction for the contribution year by reason of subsection (b)(1)(I).
“(ii) CARRYOVER RULE.—For purposes of this subparagraph, the term ‘carryover rule’ means—
“(I) subparagraph (A) of this paragraph,
“(II) subparagraphs (C)(ii), (D)(ii), (E)(ii), and (G)(ii) of subsection (b)(1), and
“(III) the second sentence of subsection (b)(1)(B).
“(iii) APPLICABLE CARRYOVER RULE.—For purposes of this subparagraph, the term ‘applicable carryover rule’ means any carryover rule applicable to charitable contributions which were (in whole or in part) not allowed as a deduction for the contribution year by reason of subsection (b)(1)(I).”.
(3) COORDINATION WITH DEDUCTION FOR NONITEMIZERS.—Section 170(p), as amended by this Act, is further amended by inserting “, (b)(1)(I),” after “subsections (b)(1)(G)(ii)”.
(b) Modification of limitation for cash contributions.—
(1) IN GENERAL.—Clause (i) of section 170(b)(1)(G) is amended to read as follows:
“(i) IN GENERAL.—For taxable years beginning after December 31, 2017, any contribution of cash to an organization described in subparagraph (A) shall be allowed as a deduction under subsection (a) to the extent that the aggregate of such contributions does not exceed the excess of—
“(I) 60 percent of the taxpayer’s contribution base for the taxable year, over
“(II) the aggregate amount of contributions taken into account under subparagraph (A) for such taxable year.”.
(2) COORDINATION WITH OTHER LIMITATIONS.—
(A) IN GENERAL.—Clause (iii) of section 170(b)(1)(G) is amended—
(i) by striking “subparagraphs (A) and (B)” in the heading and inserting “subparagraph (A)”, and
(ii) in subclause (II), by striking “, and subparagraph (B)” and all that follows through “this subparagraph”.
(B) OTHER CONTRIBUTIONS.—Subparagraph (B) of section 170(b)(1) is amended—
(i) by striking “to which subparagraph (A)” both places it appears and inserting “to which subparagraph (A) or (G)”, and
(ii) in clause (ii), by striking “over the amount” and all that follows through “subparagraph (C)).” and inserting “over—
“(I) the amount of charitable contributions allowable under subparagraph (A) (determined without regard to subparagraph (C)) and subparagraph (G), reduced by
“(II) so much of the contributions taken into account under subparagraph (G) as does not exceed 10 percent of the taxpayer’s contribution base.”.
(c) Effective date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2025.