What’s Changing for Charitable Deductions in 2026

Starting in tax year 2026, new tax rules from the One Big Beautiful Bill Act (OBBBA) will reshape how individuals receive tax benefits for charitable giving. While some taxpayers will have new opportunities to take charitable deductions, higher-income earners who itemize will face new limits. Understanding these changes is essential for donors who want to continue giving generously while maximizing the efficiency of their charitable deductions.

IN THIS ARTICLE ●        Non-itemizers can claim a new above-the-line charitable deduction ($1,000 single / $2,000 married) for direct cash gifts to qualified organizations. ●        Itemizers face new constraints, including a 0.5% AGI floor before charitable deductions begin and a reduced 35% cap on deductible charitable contributions. ●        Despite the new giving limits, donor-advised funds remain worthwhile tools for giving generously while maximizing tax advantages.

New Charitable Deduction for Non-Itemizers

Beginning for tax year 2026, those who do not itemize deductions can now take an above-the-line charitable deduction, in addition to the standard deduction. For single filers, the charitable deduction limit is $1,000, while married couples filing jointly can claim a $2,000 deduction. This new deduction applies only to direct-cash gifts; charitable contributions made to donor-advised funds or non-cash donations do not qualify for the deduction.

This is good news for those who don’t itemize. But for those who do itemize, new limits may change how you conduct your charitable giving plan. We’ll cover that in the remainder of this article.

New AGI Floor for Charitable Deductions

Effective tax year 2026, givers who itemize will encounter an AGI floor, only allowing deductions on charitable contributions that exceed 0.5% of your adjusted gross income. For corporate donors, this floor increases to 1% of taxable income, and the existing 10% of taxable income ceiling remains in place.

Overall Limitation on Itemized Deductions

Under previous law, those in the top tax bracket Were not subject to the overall limitation itemized deductions. No longer! Starting tax year 2026, high-income earners will be subject to a reduction in itemized deductions by 2/37 of the lesser of total itemized deductions or the amount that income, before itemized deductions, exceeds the 37% bracket threshold. This limit applies after all other limitations.

An Example of 2026 Charitable Deduction Changes

For example, a high-income donor who itemizes (let’s call her Sharon) and has an AGI of $1 million gives a $200,000 charitable gift. In previous years, Sharon could deduct the gift with no limitation. But with the new 0.5% AGI floor, only $195,000 of the gift can be taken into the deduction calculation. And with the updated overall itemized deduction limitation in place, Sharon can deduct only $184,460 of the gift.

Here’s an overview of the above scenario with Sharon:

• $200,000 gift
• $5,000 floor (0.5% of $1 million)
• $195,000 of the gift above the floor ($200,000 – $195,000)
• $184,460 ($195,000 – 2/37 of $195,000)

That’s a deduction loss of $15,540 compared to previous years.

What does this mean for Donor-Advised Funds?

Donor-advised funds (DAFs) still remain a powerful tool for philanthropic giving, even with these changes. However, we suggest working with your financial advisor to adjust the timing, frequency, and donation amounts in order to best maximize tax benefits while still giving to causes you care about.

Consider “bunching” your giving into one tax year

Advisors recommended bunching charitable giving into your DAF in 2025 in order to enjoy previous tax advantages prior to OBBBA changes in 2026. However, if you missed the giving deadline for tax year 2025, bunching your giving in a DAF can still benefit you in the long run.

Let’s consider another example, using two families, both with an AGI of $1 million who give $20,000 in charitable contributions each year.

Family A gives $20,000 in direct cash donations to qualified charities each year for five years. With the 0.5% floor and overall itemized deduction limitation, Family A can take a charitable deduction of $14,189 each year. Over the course of five years, that’s $70,945 worth of charitable deductions.

Family B, on the other hand, bunches five years’ worth of giving into a DAF, for a $100,000 gift in one tax year. With the new floor and limitation, the deduction calculates to $89,864—a $18,919 difference in charitable deductions compared to Family A.

Donate appreciated stocks and securities to your DAF

Cash gifts aren’t the only way to fund your DAF. You can also donate appreciated stocks and securities and take a fair-market value charitable deduction, while also avoiding capital gains. The new AGI limit and cap applies to donated securities, too.

Make your charitable giving plan with a Landmark Financial

If you’re unsure how these new charitable deduction rules will affect your philanthropic strategy—or want to explore smarter ways to structure your giving—our Landmark Financial advisors are here to help. Contact us here to get started.

Disclosure: Generally, a donor advised fund is a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors. Once the donor makes the contribution, the organization has legal control over it. However, the donor, or the donor’s representative, retains advisory privileges with respect to the distribution of funds and the investment of assets in the account. Donors take a tax deduction for all contributions at the time they are made, even though the money may not be dispersed to a charity until much later.

All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Tax laws are subject to change and may vary based on individual circumstances. The examples provided are for illustrative purposes only and should not be deemed a representation of past of future results.