Charitable Giving: New Rules for Individuals
2026 Tax Changes at a Glance
Recent tax law changes could alter the value of charitable giving for many taxpayers. While non-itemizers may benefit from a new deduction opportunity, itemizers, particularly higher-income households, should be aware of additional limitations that may reduce the tax benefit of their charitable contributions.
A New Deduction for Non-Itemizers
Taxpayers who claim the standard deduction may now deduct up to $1,000 in cash contributions to qualifying public charities, or $2,000 for married couples filing jointly.
It is important to note that contributions to donor-advised funds and most private foundations do not qualify for this deduction.
New Limitations for Itemizers
For taxpayers who itemize deductions, two new rules may reduce the value of charitable deductions.
- The 0.5% AGI Floor
Charitable contributions are deductible only to the extent they exceed 0.5% of adjusted gross income (AGI).
For example, a taxpayer with $100,000 of AGI would not receive a deduction for the first $500 of charitable contributions. Only amounts above that threshold would be deductible.
- The 35% Cap for High-Income Taxpayers
Taxpayers in the top 37% federal income tax bracket face an additional limitation that effectively caps the value of itemized deductions at 35%.
As a result, the tax savings generated by charitable deductions may be reduced by approximately 5.4%, lowering the after-tax benefit of giving.
Bottom Line
The charitable giving landscape has changed. Non-itemizers now have an incentive to make cash gifts to qualifying public charities, while itemizers, especially higher-income taxpayers, may need to be more deliberate in their planning.
Against this backdrop, thoughtful charitable strategies, including the timing of gifts and careful consideration of which organizations qualify under the new rules, may help maximize both philanthropic impact and tax efficiency. As with many tax planning opportunities, understanding the details of these new provisions will be important in evaluating the most effective approach.
