What the 2026 deduction rules change for Every Donor.

Federal tax treatment of charitable gifts changed on January 1, 2026, and most donors have not noticed yet, because the changes first appear on the return they file next spring. The rules come from Public Law 119-21, the tax and spending law signed on July 4, 2025, and widely known as the One Big Beautiful Bill Act. Four provisions matter to the people who give to charity, and they do not all point the same way.

For a nonprofit heading into year-end appeals and GivingTuesday on December 1, the useful question is which donors now get a tax benefit they did not have before, and which get a smaller one.

1. A deduction for people who do not itemize

Most households take the standard deduction. Until this year, a cash gift to charity gave them no federal tax benefit, apart from a temporary deduction of a few hundred dollars that expired after 2021. Section 70424 of the new law brings that idea back, makes it permanent, and raises it: beginning with tax year 2026, a taxpayer who does not itemize can also deduct up to $1,000 of charitable gifts, or $2,000 for a married couple filing jointly.

The IRS draft of the 2026 Form 1040 gives the deduction its own line, 12f, directly below the standard deduction.

The rules are narrow. The IRS says only cash contributions to eligible charities count. Clothing, stock, and other property do not. Gifts to donor-advised funds and to supporting organizations do not qualify, and carryovers from earlier years cannot be used.

2. A floor for people who itemize

Section 70425 adds a floor for itemizers. Charitable gifts are deductible only to the extent the year's total exceeds 0.5 percent of the donor's contribution base, which for most people is adjusted gross income. A household with $200,000 of income gets no deduction for its first $1,000 of giving. A household with $80,000 loses the first $400.

For most donors, the amount lost to the floor is simply gone. The law lets it carry forward only from a year in which the donor's giving also exceeded the existing percentage-of-income ceilings, which few people reach.

3. A smaller benefit at the top

Section 70111 rewrites the limit on itemized deductions for the highest earners. For taxpayers in the 37 percent bracket, itemized deductions, charitable gifts included, are reduced by 2/37 of the smaller of two amounts: the deductions themselves, or the amount by which the donor's income, before those deductions, reaches into the top bracket. For a donor fully in the top bracket, the arithmetic means each deducted dollar now saves about 35 cents of federal tax instead of 37.

4. A floor for corporate gifts

Section 70426 sets a similar floor for corporations. A company's charitable contributions are deductible only above 1 percent of its taxable income, and still no more than 10 percent. Nonprofits that rely on corporate gifts may hear about it when sponsors set next year's budgets.

What it means for a year-end plan

• Tell small donors, carefully. A supporter who gives $100 by card can now take a deduction without itemizing. Say so plainly in an appeal, but do not promise a specific result. Point donors to the IRS or their own tax preparer.
• Keep receipts complete. The written acknowledgment rule for single gifts of $250 or more still applies. Our brief on the sentence most receipts leave out covers what it needs to say.
• Expect some donors to bunch. Because the floor applies every year, an itemizer who concentrates two years of giving into one pays it once rather than twice. Expect questions about December versus January.
• Know what does not count. Gifts to a donor-advised fund and noncash gifts are not eligible for the non-itemizer deduction. A donor who gives through a fund should not expect it.

Will people give more?

Expectations are modest. In a national survey released in September by the Indiana University Lilly Family School of Philanthropy, 19 percent of respondents said the universal charitable deduction would lead them to give more, down from 24.4 percent in 2023, when the idea was still hypothetical. More than three-quarters said their giving would stay the same.