2026 Charitable Giving Tax Changes: What Donors Need to Know

9/28/2026 - By Michael Cole, JD, MSPA & Stacey Craig, CPA

Starting in 2026, the tax rules for charitable giving get a little less generous, and a lot more “it depends.” The deduction isn’t going away, but smaller gifts may not move the needle on your taxes unless your total giving clears new minimum thresholds. Below is a plain-English guide to what’s changing for individuals, businesses, and nonprofits (plus a few practical takeaways).

For tax years starting after December 31, 2025, here are the headline changes:

  • Itemizers (individuals): You generally only get a charitable deduction once your total gifts for the year are more than 0.5% of your AGI (your income base for this rule).
  • Corporations: You generally only get a deduction once total gifts are more than 1% of taxable income, and deductions still can’t exceed 10% of taxable income (with special rules for certain types of gifts).
  • Big cash gifts to public charities: The familiar 60% limit for individuals’ cash gifts to qualifying public charities sticks around—but now it sits on top of the new “floor” rule.
  • Non-itemizers: There’s a small, above-the-line deduction for cash gifts—up to $1,000 (or $2,000 if married filing jointly)—but it’s limited to certain charities and excludes donor-advised funds and supporting organizations.
  • Higher-income households: Another rule that limits itemized deductions returns, so even deductible gifts may be worth a bit less at the margin.
  • Real-world impact: Smaller “every-year” gifts are more likely to have no current federal tax benefit unless you give enough to clear the new floor. Bigger (or bunched) gifts can still be deductible, subject to the usual caps and paperwork.

What’s actually changing in 2026?

Think of the new rules as adding a “minimum giving threshold” before the tax deduction kicks in. After you clear that threshold, the familiar percentage limits and documentation rules still apply.

If you’re an individual donor

The new idea is if you itemize, you generally can’t deduct the first 0.5% of your AGI that you give to charity each year. Only the amount above that “floor” counts toward your itemized charitable deduction.

For example, if your AGI is $500,000, the floor is $2,500. If you donate $2,500 total, you get no charitable deduction for it. If you donate $12,500 total, you’re generally starting with a $10,000 deduction (subject to the usual percentage limits and documentation rules).

What’s AGI? For most people, it’s basically your income on your tax return before itemized deductions used here as the yardstick to calculate that 0.5% floor.

Two other individual rules to know:

  • The 60% cash limit stays: Cash gifts to qualifying public charities can still be deductible up to 60% of AGI. The catch is you still have to clear the 0.5% floor first.
  • Non-itemizers get a small win: If you don’t itemize, you may be able to deduct up to $1,000 (or $2,000 joint) for cash gifts to certain public charities but not to donor-advised funds or supporting organizations.

If you’re a corporation (or advising one)

The new idea is that corporate giving now has a “floor” too. In general, a corporation only gets a charitable deduction for the amount of total gifts that is over 1% of taxable income, and the total deduction still can’t exceed 10% of taxable income (with special rules for certain donations).

Why this matters if corporate gifts don’t clear the 1% floor, that “below-the-floor” slice may be lost in many common situations. Carryforwards still exist, but the rules now track amounts blocked by the 1% floor separately from amounts blocked by the 10% cap.

Another limitation on itemized deductions returns in 2026. Translation: even when your charitable gifts are deductible, the tax value of that deduction can be reduced for higher-income households. If you’re in a top bracket, don’t assume “deductible” automatically means “full-value.”

So what does this mean for people who give?

Small, steady gifts may stop being “deductible” (for itemizers)

The 0.5% floor means you may get zero charitable deduction until your total giving clears that threshold. Example: at $500,000 AGI, the first $2,500 of gifts doesn’t count for the deduction; at $2,000,000 AGI, the first $10,000 doesn’t count.

If you usually give “a little each year,” you may see a smaller (or no) federal tax benefit unless your annual total is high enough to clear the floor by a meaningful amount.

Carryforwards matter more (but they’re not automatic)

Some “disallowed this year” gifts can carry forward to future years, but the new floor makes the details more important. In plain terms:

  • If your gifts are so large that you hit the usual percentage caps, you may be able to carry forward some amounts (depending on the bucket/type of gift).
  • If your gifts are not large enough to trigger those caps, the “below-the-floor” slice may be permanently unusable.

Cash gifts to qualifying public charities remain comparatively straightforward because the 60% limit is permanent. Still, the overall math is now affected by the new 0.5% floor, how your gifts fall into different percentage “buckets,” and the returning itemized deduction limitation for higher-income taxpayers.

If you don’t itemize, the deduction is small (but real)

Non-itemizers may be able to deduct up to $1,000 ($2,000 joint) for cash gifts to certain public charities. It won’t cover big philanthropic plans, but it’s a welcome nudge for everyday giving.

Section 170(p) gives nonitemizers a deduction for cash gifts up to $1,000 ($2,000 joint), but only for gifts to Section 170(b)(1)(A) organizations and not to supporting organizations or donor advised funds. This helps smaller donors who do not itemize, but the deduction is capped and limited to cash gifts.

The IRS didn’t get any more forgiving. Keep your receipts and follow the rules, especially for bigger gifts and anything noncash.

  • $250+ gifts: get a timely written acknowledgment from the charity.
  • Cash gifts: keep bank records/receipts.
  • Noncash gifts (especially higher-value): expect extra forms and, in some cases, a qualified appraisal.

What does this mean for businesses that give?

The first 1% may be “no deduction this year”

For many corporations, the new 1% floor means the first slice of annual giving may not be deductible. If the company’s total gifts don’t exceed the usual 10% cap (and therefore don’t create carryforwards), that below-the-floor amount can be effectively lost.

Practical implication: “Same gift every year” strategies may need a rethink if the business keeps losing the first 1% annually.

Carryforwards can help—but only in the right fact pattern

As a rule of thumb, carryforwards show up when the company gives enough to run into the upper limit (the 10% cap). If you never get near that cap, the floor may just keep shaving off deduction value each year.

Special donation programs may have special rules

Some contributions (like certain food inventory donations) have their own limits and may interact differently with the new corporate floor. If a company relies on a special giving program, it’s worth getting tax advice on the exact mechanics.

Double-check whether a payment is “charity” or “business”

Some payments to nonprofits are really charitable gifts, while others might qualify as ordinary business expenses depending on the facts (for example, when there’s a clear business purpose and a reasonable expectation of return). The new 1% floor makes correct classification more important—so document the “why” behind the payment.

What nonprofits might notice

Giving may get lumpier. Because donors may need to clear new “floors” to see a tax benefit, some nonprofits may see fewer small deductible gifts and more big “bunched” gifts in select years.

  • More donors may consolidate giving into fewer years.
  • Annual campaigns may feel less predictable.
  • Donors may ask more questions about receipting, valuation, and timing.

Some donors may favor public charities over other vehicles

Because the 60% cash limit and the non-itemizer cash deduction are both tied to certain public charities, some donors may lean toward giving directly to those organizations rather than through donor-advised funds or supporting organizations (depending on their situation).

Receipts and documentation become part of the donor experience

As deductions get harder to “unlock,” donors tend to be more sensitive to acknowledgments, timing, and valuation support. Fast, accurate receipts and clear gift acceptance guidelines can make giving feel easier—and safer—for donors.

The IRS challenge articles show active scrutiny of:

Smart (and simple) ways to plan your giving

  • Consider bunching: If you’re close to the 0.5% floor, you may get more tax mileage by combining multiple years of gifts into one year (if that fits your charitable goals).
  • Track your “floor” number early: Estimate 0.5% of AGI (individuals) or 1% of taxable income (corporations) so you know what it takes for deductions to start.
  • Keep cash gifts simple when you can: Cash to qualifying public charities is often the easiest to document and apply.
  • Plan noncash gifts ahead of time: Larger noncash donations can require forms, valuations, and appraisals—start early.
  • Don’t forget receipts: Missing acknowledgments can sink an otherwise legitimate deduction.

Still true in 2026: the rules you can’t ignore

  • Make sure the organization qualifies (not every “good cause” is a deductible charity).
  • Watch the percentage caps (they still apply, especially for large gifts).
  • Noncash gifts have extra hoops (forms, valuations, and sometimes appraisals).
  • Partial-interest and special-asset rules can block deductions in certain structures.
  • Documentation is non-negotiable get the right acknowledgment, on time.

If you want the tax benefit, assume the IRS will care about the details, and plan your giving like you plan everything else: early, documented, and with clear goals.

Plan Ahead for Your Charitable Giving

In 2026, charitable giving still “counts” but the tax payoff is more sensitive to how much you give, when you give, and how you give. For individuals, the new 0.5% AGI floor means smaller annual gifts may not create a deduction. For corporations, the 1% floor can shave off deduction value year after year unless the company’s giving pattern triggers carryforwards. For nonprofits, that can translate into lumpier donations and more donor questions about receipts and timing.

With changes to the tax treatment of charitable giving in 2026, thoughtful planning can help you make informed decisions about your charitable contributions and maximize the potential tax benefits available to you. Whether you’re an individual donor, business or nonprofit, our Tax team can help you understand how the new rules may affect your giving strategy and plan ahead. Contact the Saltmarsh Tax team today to discuss your charitable giving and tax planning needs.

About the Authors

Michael Cole, JD, MSPA

Michael is a partner with experience across tax, accounting, and advisory services. He began his career in public accounting over 15 years ago, focusing on tax consulting and compliance. His primary areas of experience include providing services related to mergers and acquisitions, 704(b) allocations, and complex transaction structuring for private equity firms and family offices.

Stacey Craig, CPA

Stacey is a partner with experience across tax compliance, planning, and consulting services. Stacey is a trusted tax advisor known for delivering clear, strategic guidance that helps clients make confident financial decisions. With more than two decades of experience in tax compliance, planning, and consulting, she brings deep expertise to partnerships, S corporations, nonprofits, high-net-worth individuals, trusts, and estates.

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