Key Changes to Charitable Giving Tax Rules 2026

1. New charitable deduction for non-itemizers

Beginning with the 2026 tax year, taxpayers who claim the standard deduction may also deduct cash charitable contributions of up to $1,000 for single filers and $2,000 for married couples filing jointly.

This deduction applies only to cash donations made directly to qualified charitable organizations, such as 501(c)(3) public charities. It does not apply to non-cash gifts (such as property), donor-advised funds, supporting organizations, or most private foundations.

2. New 0.5% AGI floor for itemizers

Taxpayers who itemize may deduct only the portion of charitable contributions that exceeds 0.5% of adjusted gross income (AGI).

Example: If your AGI is $100,000, only contributions above $500 are deductible.

A $400 donation provides no deduction.
A $600 donation results in a $100 deduction.

3. Deduction cap for high-income taxpayers

Taxpayers in the 37% federal income tax bracket are now subject to a limitation on itemized deductions, including charitable contributions. The tax benefit is generally capped at 35 cents per dollar deducted.

Example: A $1,000 charitable deduction may reduce taxes by $350, rather than $370 under prior rules.

Tax Planning Strategies

If you take the standard deduction-
Consider making direct cash gifts to qualified charities to take advantage of the new charitable deduction. Spacing contributions throughout the year or concentrating them near year-end may help maximize the available deduction.

If you also use a donor-advised fund, a blended approach may be beneficial. For example, you could make a direct cash contribution of $1,000 or $2,000 to qualify for the deduction and direct additional charitable gifts to the donor-advised fund.

If you itemize
“Bunching” charitable contributions into one tax year may help you exceed both the standard deduction and the new 0.5% AGI floor, increasing the value of itemizing. In years with lower deductible expenses, taking the standard deduction may be more beneficial.

If you are retired
Taxpayers age 70½ or older may benefit from Qualified Charitable Distributions (QCDs) from an IRA. Because QCDs reduce taxable income directly, they may be more advantageous than claiming an itemized deduction under the new AGI limitation.

For taxpayers age 73 and older, QCDs can also help satisfy required minimum distributions (RMDs). In some cases, combining QCDs with standard deduction planning or bunching deductions may provide greater tax efficiency.

Make the most of your charitable giving
A thoughtful giving strategy can help maximize tax benefits while continuing to support the organizations and causes that matter most.

Contact our office for more information.