2026 Charitable Giving Tax Rules

January 2026 – Generosity CORNER – At DeKalb County Community Foundation, we are honored to be your home for charitable giving. Whether you support many nonprofit organizations, focus on a few local causes you care about most, partner with the Community Foundation to address the region’s greatest needs, or do all of the above, we are here to support you every step of the way.

A new year is always a good time to review your charitable giving plans. This is especially true in 2026. Along with ongoing opportunities to strengthen our community’s quality of life, several new tax law changes may affect how charitable giving fits into your overall financial picture.

We encourage you to review the updates below and share them with your tax advisors as soon as possible. You may want to forward this article, print it, or bring it with you to your next meeting. These conversations can help ensure your charitable goals and tax planning stay aligned.

1. New threshold for itemized charitable deductions

• One of the most significant changes affects individuals who itemize their deductions. Beginning this tax year, charitable contributions are deductible only to the extent that they exceed 0.5 percent of a taxpayer’s adjusted gross income.
• For example, a taxpayer with an adjusted gross income of $200,000 will not receive a deduction for the first $1,000 of charitable gifts made during the year. Only contributions above that amount may be deductible, subject to existing income-based limits.
• This new rule works much like a deductible in an insurance policy. It raises the threshold for receiving a tax benefit and may reduce the tax impact of smaller annual gifts for those who itemize.

2. New limits for high-income taxpayers who itemize

• High-income taxpayers will also see a new cap on the value of itemized charitable deductions. Even if a donor is in the highest federal income tax bracket, the tax benefit of a charitable deduction will be limited to 35 percent of the contribution.
• As a result, taxpayers in the 37 percent bracket will no longer be able to offset income at their full marginal rate when making charitable gifts.

3. Positive news for the 60 percent cash gift limit

• There is good news for donors who make significant cash contributions. The long-standing rule allowing cash gifts to qualified public charities to be deducted up to 60 percent of adjusted gross income has been made permanent.
• After meeting the new 0.5 percent adjusted gross income threshold, donors may continue to deduct cash contributions up to this level. Noncash gifts and contributions to certain organizations remain subject to lower limits. This change provides long-term certainty for donors who are planning larger gifts.

4. New incentive for donors who do not itemize

• The new rules also create an incentive for taxpayers who take the standard deduction. Beginning in 2026, non-itemizers may claim a limited charitable deduction that reduces income before adjusted gross income is calculated.
• Single filers may deduct up to $1,000, and married couples filing jointly may deduct up to $2,000, as long as the gifts are made in cash. This deduction is available in addition to the standard deduction.
• It is important to note that gifts to Donor Advised Funds and noncash gifts do not qualify for this deduction. While this is a limitation, Donor Advised Funds and gifts of appreciated assets remain valuable tools for many donors who want flexibility and long-term impact.

5. Qualified Charitable Distributions may be even more valuable

• Older taxpayers and retirees will see a helpful increase in the Qualified Charitable Distribution limit beginning in 2026. Individuals age 70 ½ and older will be able to transfer up to $111,000 per year, up from $108,000 in 2025, directly from an individual retirement account to a qualified charity.
• These distributions are not included in taxable income and may count toward required minimum distributions. This strategy remains unaffected by itemized deduction limits, income thresholds, or deduction caps, making it a powerful option for tax-efficient giving.

6. Changes affecting corporate charitable deductions

• Corporate donors are also impacted by the new framework. Starting in 2026, corporations may deduct charitable contributions only to the extent that those contributions exceed 1 percent of taxable income.
• Contributions below that threshold will not generate a current-year deduction, although excess amounts may be carried forward to future years. The existing 10 percent cap on corporate charitable deductions remains in place. These changes may influence how businesses approach their charitable giving strategies.

Let’s work together

We strongly encourage you to share this information with your tax advisors and include the Foundation in those conversations. We are happy to work alongside your attorney, financial advisor, and CPA to help ensure your charitable plans for 2026 support both your personal goals and your broader tax, financial, and estate planning objectives.

Whether you copy us on an email, ask your advisor to contact us directly, or bring everyone together for a quick call or Zoom meeting, we are here for you and look forward to the conversation. Please reach out anytime. We are honored to partner with you to ensure your generosity continues to make a lasting difference in the community we all love.

To learn more or begin the conversation, contact Executive Director Dan Templin at 815-748-5383 or dan@dekalbccf.org.

Philanthropy comes in many forms, and every act of generosity makes a difference. In these Generosity CORNER articles, we’ll share ideas for giving, smart strategies for maximizing your charitable impact, and tips on tax-wise giving, legacy planning, and family philanthropy. Whether you’re a charitable estate planning advisor, a longtime donor, or just beginning your giving journey, this space is for you. Inform and inspire!

Together, we can make a lasting difference—one generous act at a time!  Learn more about Generosity Across Generations.