Charitable Giving Rules Change in 2026
Charitable contributions will be treated differently on federal tax returns beginning next year. New provisions in the One Big Beautiful Bill Act (OBBBA) change how donations reduce taxable income for both standard deduction filers and taxpayers who itemize. While the changes do not affect whether a gift can be made to a qualified charity, they do affect if and how much of that gift produces a tax benefit. Since the new rules take effect January 1, 2026, taxpayers who regularly give to charitable organizations may want to review how the rules differ between 2025 and 2026 before making decisions. To help clients, prospects, and others, Klatzkin has summarized the key details below.
How the Rules Work for Standard Deduction Filers
2025 Treatment — In 2025, taxpayers who claim the standard deduction do not receive a federal income tax deduction for charitable contributions. Donations still support charitable organizations, but they do not reduce taxable income. This has been the general rule since the temporary pandemic-era charitable deduction expired.
What Changes in 2026 — Beginning in 2026, standard deduction filers may claim an above-the-line charitable deduction. The new provision allows a deduction of up to $1,000 for single filers and up to $2,000 for married couples filing jointly. Contributions above those amounts do not generate additional tax savings for standard deduction filers. It applies only to cash contributions made to qualified charitable organizations and is claimed in addition to the standard deduction.
Year-End Considerations — Individual taxpayers who take the standard deduction may want to review when they time charitable gifts. By waiting until January 2026 to make a cash contribution, they may receive a greater tax benefit. Other taxpayers may be close to itemizing in 2025 because they have higher mortgage interest, state and local taxes, or medical expenses. In those cases, grouping charitable contributions into 2025 may actually help push total deductions above the standard deduction threshold for the year, at which time the rules for itemizers would apply.
How the Rules Work for Itemizers
2025 Treatment — Taxpayers who itemize deductions in 2025 may continue to deduct charitable contributions as they have in prior years. Cash gifts to qualified charities are generally deductible up to 60% of adjusted gross income (AGI), and donations of long-term appreciated assets, such as publicly traded stocks, are generally deductible up to 30% of AGI. Contributions that exceed these limits may be carried forward for up to five years.
What Changes in 2026 — Starting in 2026, itemized charitable deductions are subject to a new floor. Taxpayers must first exceed 0.5% of AGI before charitable contributions become deductible. For example, a taxpayer with $500,000 of adjusted gross income must exceed $2,500 of charitable contributions before any amount becomes deductible.
In addition, high-income taxpayers will see a reduced benefit from itemized deductions. Those in the top tax bracket of 37% may claim only up to a 35% tax benefit on charitable contributions. These individuals can still choose to give at any level, but they may see reduced tax savings associated with giving in future years. The prior AGI limits continue to apply.
Year-End Considerations — Taxpayers who expect to itemize in both 2025 and 2026 may want to consider accelerating planned charitable contributions into 2025. Making larger gifts before year end may avoid the new income-based floor and preserve a higher tax benefit. Some may also choose to “bunch” multiple years of giving into 2025. This is particularly useful if they use donor-advised funds (DAFs) or plan to make large annual contributions.
Other considerations include donating appreciated assets rather than making cash donations. This way, the taxpayer generally avoids paying capital gains tax and is still able to claim a charitable deduction. Another option is to sell securities at a loss and donate the proceeds. This is generally known as tax-loss harvesting, and it can help offset capital gains for the year or up to $3,000 of ordinary income. It also results in a deduction, if the proceeds go to a qualified charity.
Taxpayers age 70 1⁄2 or older may also consider qualified charitable distributions (QCD) from an IRA in the future. These are excluded from gross income and count toward required minimum distributions (RMDs).
A Note for C-Corporations
Charitable contribution rules also change for C-corps beginning in 2026. While these corporations may continue to deduct charitable gifts up to 10% of taxable income, a new minimum threshold applies. Contributions are deductible only to the extent they exceed 1% of taxable income. This means that corporate gifts may no longer generate a deduction unless total contributions exceed the new floor. Corporations that plan on annual giving may want to review contribution levels and timing as part of year-end planning.
Contact Us
Charitable giving rules that take effect in 2026 introduce new limits, new deductions, and new planning considerations. For taxpayers who give regularly, the final weeks of 2025 offer a brief window to review whether making gifts now or waiting until the new year creates a better tax outcome. If you have questions about the information outlined above or need assistance with another tax or accounting issue, Klatzkin can help. For additional information call 609-890-9189 or click here to contact us. We look forward to speaking with you soon.