What Is the 1% Charitable Deduction Floor?
Beginning in 2026, corporations can only deduct charitable contributions that exceed 1% of their taxable income.
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Example: A company with $100 million in taxable income can only deduct donations above $1 million.
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This rule was designed for cash and stock contributions, but because of how the law was written, it also applies to in-kind food donations.
The problem:
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Most surplus food donations don’t add up to 1% of a company’s income – meaning many businesses won’t get a charitable deduction at all for donating food.
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But if that same food is thrown away, companies can still claim a business loss deduction (which has no floor).
Bottom line: The tax code now makes it cheaper to waste food than to donate it.
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Why It Matters
Fairness for Businesses:
Restaurants and grocers should not be penalized for donating surplus food when it costs more to donate than to dispose.
Stronger Communities:
Surplus food donations are the backbone of local food banks, churches, and nonprofits that serve families.
Responsible Stewardship:
Keeping good food out of landfills is about efficiency and making the most of what we produce.
OUR SOLUTION
A narrow, technical correction will fix the problem: Exempt surplus food donations from the OBBBA’s new 1% charitable floor.
JOIN THE COALITION
Protecting Surplus Food Donations
A glitch in the One Big Beautiful Bill Act (OBBBA) threatens the nation’s food rescue system. Without a fix, businesses will have fewer incentives to donate surplus food, putting millions of meals and community food banks at risk.
The Issue
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Under the OBBBA, businesses can still claim deductions when they throw food away, but many will lose deductions if they donate surplus food.
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This creates a disincentive – cheaper to waste than to donate.
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If large corporations pull back, independent restaurants and local food banks lose the infrastructure they rely on. The entire food rescue system could unravel.
