Year-end is when many families make most of their charitable gifts. In 2026, the federal rules for deducting those gifts changed in ways that help some donors and cost others a little. The changes come from the federal tax law enacted on July 4, 2025 (Public Law 119-21) and apply to tax years beginning after December 31, 2025. Here is what is different this year and how to plan around it.
New: a charitable deduction if you do not itemize
Most taxpayers take the standard deduction ($16,100 for single filers and $32,200 for married couples filing jointly in 2026), and until now that usually meant their gifts produced no tax benefit. Starting in 2026:
- Non-itemizers can deduct up to $1,000 of charitable gifts, or $2,000 on a joint return, in addition to the standard deduction.
- Only cash gifts count. Gifts made by cash, check, or credit or debit card qualify. Donations of clothing, household goods or stock do not.
- Only gifts to qualifying charities count (generally public charities such as churches, schools and most community nonprofits). Contributions to a donor-advised fund, or to a type of organization known as a supporting organization, do not qualify for this deduction.
For a married couple who gives $2,000 in cash to their church and local charities during the year, this could reduce federal taxable income by $2,000 even though they do not itemize.
New for itemizers: a 0.5 percent floor
If you itemize, your charitable deduction is now reduced by a floor equal to 0.5 percent of your contribution base, which for most people is their adjusted gross income (AGI). Only giving above that amount is deductible.
Example: A couple with AGI of $300,000 has a floor of $1,500. If they give $10,000 to charity in 2026, $8,500 is deductible as an itemized deduction.
For most donors the floor is modest, but it does mean small amounts of giving by higher-income itemizers may produce no deduction at all.
New for the top bracket: a 35 percent cap on the benefit
Beginning in 2026, taxpayers in the 37 percent bracket face a new limitation that reduces their itemized deductions, including charitable gifts, so that each deducted dollar saves them about 35 cents in federal tax rather than 37 cents. In 2026, the 37 percent bracket starts at taxable income above $640,600 for single filers and $768,700 for married couples filing jointly. The generous rule allowing cash gifts to public charities of up to 60 percent of AGI was made permanent.
Planning strategies for 2026
- Bunching. If your itemized deductions are close to the standard deduction, consider grouping two or more years of planned giving into a single year. In the “giving” year you itemize; in the other years you take the standard deduction, plus up to $1,000 or $2,000 for cash gifts to qualifying charities. Because the higher state and local tax cap (now $40,400 for 2026) makes itemizing more common for California homeowners, it is worth checking which side of the line you are on.
- Donor-advised funds. A donor-advised fund lets you make a large deductible gift in one year and recommend grants to charities over time, which can make bunching easier. Remember that gifts to a donor-advised fund do not count toward the new non-itemizer deduction.
- Give appreciated stock instead of cash. If you itemize, donating stock or mutual fund shares you have held for more than a year generally lets you deduct the fair market value and avoid capital gains tax on the appreciation. (Stock gifts do not qualify for the non-itemizer deduction.)
- Qualified charitable distributions (QCDs). If you are 70½ or older, you can transfer up to $111,000 in 2026 directly from your IRA to a qualifying charity. The QCD is excluded from your income instead of being deducted, so it can work whether or not you itemize, is not affected by the 0.5 percent floor, and can count toward your required minimum distribution.
Do not forget the paperwork
- For any single gift of $250 or more, you need a written acknowledgment from the charity before you file, showing the amount and whether you received anything in return.
- For cash gifts of any size, keep a bank record or a receipt from the charity.
- To count for 2026, a gift must be made by December 31. A check counts when it is mailed, and a credit card gift counts when it is charged, even if you pay the card bill in January.
- Make sure the organization is a qualified charity. You can check with the IRS Tax Exempt Organization Search tool.
California
California does not follow the new federal rules. According to the Franchise Tax Board’s summary of the federal law (last updated October 2026), California does not conform to the new non-itemizer deduction or to the 0.5 percent floor. On your California return, charitable gifts are deductible only if you itemize for California purposes, under California’s own rules.
Sources
- IRS: One, Big, Beautiful Bill provisions (charitable deduction for non-itemizers)
- Congress.gov: Text of H.R. 1 (Public Law 119-21), sections 70111, 70424 and 70425
- IRS Revenue Procedure 2025-32 (2026 standard deduction and brackets)
- IRS Notice 2025-67 (2026 qualified charitable distribution limit)
- IRS Publication 526, Charitable Contributions
- IRS: Tax Exempt Organization Search
- California Franchise Tax Board: Summary of Federal Income Tax Changes
A little planning can help your gifts go further for the causes you care about. Don’t hesitate to contact the office or call us at (858) 549-1295 if you have questions.
This article provides general information as of October 2026 and is not tax advice for your specific situation. Tax rules change, and the right answer depends on your facts.