Give Smarter in 2026: New Tax Breaks (and Limits) for Charitable Contributions

If you give to charity... whether it’s your church, local nonprofits, or national organizations, you give with heart, but also count on the tax deduction as well. 

With the One Big Beautiful Bill Act (OBBBA) in place, the rules on who can deduct charitable donations and how much...are about to change.

The good news... if you do not itemize, you will still get to deduct some charitable donations on your tax return.  We saw similar rules during the pandemic years and are happy to see a version of them coming back once again.

The bad news... if you itemize, you will have a floor and only be allowed to deduct donations above a certain amount. So you won't get 100% of that deduction any more.

Here’s what’s changing, who it affects, and how you can maximize the benefit.

Non-Itemizers Can Deduct Charitable Giving Again (Starting in 2026)

We saw $300 deductions allowed during the COVID years for taxpayers who claimed the Standard Deduction. If you are in this category and take the Standard Deduction each year, here's what is coming your way.  You will get a tax benefit for charitable donations even if you are not itemizing...and this rule is now "permanent"

Here’s the details:

• You can deduct up to $1,000 if you file single, or $2,000 if you’re married filing jointly. even if you take the standard deduction.

• The deduction only applies to cash contributions to qualified charities (no goods, services, or donor-advised funds).

This gives standard deduction filers (which is the majority of taxpayers) a rare chance to benefit from giving just like itemizers do.

This does not apply for 2025. It starts in 2026.

Itemizers: There’s a New 0.5% AGI Floor on Charitable Deductions

If you do itemize your deductions, there’s a new bottom limit coming in 2026 that could reduce how much of your charitable giving is deductible.

Starting in 2026, you can only deduct the amount of charitable contributions that exceed 0.5% of your adjusted gross income (AGI).

Example:

Let’s say your AGI is $250,000, and you donate $10,000 to qualified charities.

• 0.5% of your AGI is $1,250.

• That means the first $1,250 isn’t deductible.

• You can deduct the remaining $8,750 on your taxes.

So while this new rule doesn’t stop you from giving, it does mean small or spread-out donations may not be as impactful at tax time unless you give over the threshold.

Pro Tip: This AGI floor doesn’t apply to Qualified Charitable Distributions (QCDs) from IRAs if you're over age 70½ — a great strategy for retirees to consider.

How to Tax Plan with these new Charitable Write-Off rules?

• Do I usually itemize or take the standard deduction?

• How much do I give to charity in a typical year?

• Would it make sense to bundle a few years of giving into one?

• Should I consider a Qualified Charitable Distribution from my IRA?

Planning ahead is the key to maximizing your tax benefit while supporting the causes you care about. 

Tax planning does not happen at tax filing, it happens all year long...during the tax year.

Smart Giving Strategies to Consider

If you want to make your giving go further under the new rules, consider:

• Tracking donations carefully (and getting receipts)

• Bunching donations into one year to clear the AGI floor

• Using donor-advised funds for strategic long-term giving

• Talking to a CPA or tax advisor about QCDs or other retirement-driven strategies

• Looking to offset a large tax bill, talk to your tax advisor to see if Leveraged Charitable Donations could be an option for you.

With the new SALT cap rules, will you Itemize now?

Along with the OBBBA charitable donation changes, comes higher standard deductions and higher State and Local Tax (SALT) deductions. If you live in a high taxed state like California or New York, you may be able to deduct more of your state taxes in the coming tax years moving you to an Itemized filer.

• If you were limited to only deducting $10,000 in state taxes but paid much more...and your Adjusted Gross Income (AGI) is under $500k, you will find you can now deduct up to $40,000 in state taxes paid and shift you to be an Itemized Deduction filer.

• This new SALT limit increase starts phasing out for filers with AGI at $500k and at $600k in AGI, it reverts back to the $10,000 limit.

You can read more about other changes in the OBBBA and the SALT cap increase at Major Tax Changes from the OBBBA: What You Need to Know for 2025

Proactive tax planning and some strategic moves could make a huge difference in your tax bill for 2025 and going forward.  

Final Thought: Give Generously, Plan Intentionally

The OBBBA gives taxpayers, especially middle-income earners and small business owners new ways to benefit from their generosity. Whether you give $100 or $10,000, make sure your giving is not just heartfelt, but tax-smart too.

2026 will be here before you know it. Are your donations working for your tax plan?

Book a Year-End Tax Planning Consultaiton with our team of experts and see how you can minimize your tax bill with strategic planning.