Beginning January 1, 2026, new federal tax laws (part of the One Big Beautiful Bill Act) will take effect, changing how charitable donations are treated for tax purposes. These updates will influence who can claim deductions, how much can be deducted, and which types of gifts qualify. Understanding the new rules can help donors plan their giving strategically.
Key Changes Taking Effect in 2026
- New deduction opportunity for non-itemizers
For the first time, individuals who do not itemize deductions will be able to deduct up to $1,000 in cash donations to qualified public charities, or $2,000 for married couples filing jointly. This means nearly all taxpayers will now receive a modest tax benefit for charitable contributions. - A new “floor” for itemized deductions
Those who itemize will still be able to deduct charitable contributions, but only the portion that exceeds 0.5% of adjusted gross income (AGI). For example, a donor with an income of $200,000 could deduct only the amount of charitable giving that exceeds $1,000. This change may make smaller gifts less impactful for tax purposes, and donors may wish to plan accordingly. - Reduced deduction value for higher-income donors
For individuals in the top tax bracket, the value of charitable deductions will be capped at 35%, down from the current 37%. While modest, this reduction could affect larger or multi-year gifts. Donors considering significant contributions may find it beneficial to complete them before the new law takes effect. - Corporate giving adjustments
Corporations will only be able to deduct charitable contributions that exceed 1% of taxable income, though the existing 10% cap will remain. This change may encourage more intentional, planned giving among corporate donors. - IRA giving remains unchanged
Rules for Qualified Charitable Distributions (QCDs)—direct transfers from an IRA to a charitable organization—will remain the same. Individuals age 70½ and older can continue to use QCDs to satisfy required minimum distributions while excluding the transfer from taxable income. This remains one of the most tax-efficient ways to give.
Planning Considerations for Donors
These adjustments may affect individual giving strategies. Donors can work with financial or tax advisors to determine how best to adapt. Common strategies may include:
- “Bunching” gifts: Combining multiple years of giving into one tax year to exceed the new 0.5% threshold.
- Timing large gifts: Completing major donations before 2026 to take advantage of current deduction rules.
- Exploring non-cash gifts: Using appreciated securities or QCDs to preserve tax benefits.
- Coordinating giving strategies: Aligning charitable gifts with other deductions or income planning to maximize overall benefits.
How Champions For Learning Can Help
The Education Foundation of Collier County – Champions For Learning continues to serve as a trusted resource for donors seeking to align their philanthropy with educational impact. The organization can work with donors and their advisors to help structure gifts in the most effective and tax-efficient way, whether through cash contributions, appreciated assets, or planned giving.
Contact our development team by emailing development@championsforlearning.org or call (239) 643-4755.
Disclaimer:
This information is provided for general educational purposes only and should not be considered legal or tax advice. Donors should consult their tax or financial professional regarding their individual circumstances.