For many families, charitable giving is one of the most consistent parts of their financial lives. The amounts may change over time, and the causes may evolve, but the act of giving often becomes a habit. Beginning in 2026, the tax rules surrounding charitable contributions introduce a few quiet changes that do not alter why people give, but do affect how charitable gifts show up on a tax return.
These changes can influence the after-tax cost of giving, particularly for households that make regular annual contributions or that sit near the margin between taking the standard deduction and itemizing.
A small threshold with real consequences
One of the most meaningful changes in 2026 is the introduction of a minimum threshold for charitable deductions tied to adjusted gross income. For taxpayers who itemize, the first 0.5% of adjusted gross income worth of charitable contributions does not generate a deduction. Only the portion above that level may be deductible, subject to the usual percentage limits and requirements linked to the type of gift made, such as cash, securities, or other property.
At first glance, the rule may appear modest. In practice, it becomes clearer through an example. A household with $100,000 of adjusted gross income that itemizes deductions contributes $4,000 to qualified charities during the year. Under the new rules, the first $500 of that giving does not reduce taxable income. The remaining $3,500 may be deducted. The gift itself is unchanged, but the tax benefit is slightly lower than in prior years.
For taxpayers who itemize and are in the highest marginal tax bracket, this threshold has a slightly amplified effect. Since itemized charitable deductions generally offset income taxed at high federal rates, the portion of giving that falls below the 0.5% adjusted gross income threshold no longer generates the same tax benefit. Practically speaking, this can increase the after-tax cost of the non-deductible portion of charitable giving by roughly two cents per dollar for top-bracket taxpayers. While modest in any single year, this effect may compound over time for families who give consistently.
For families who give similar amounts every year, this threshold applies annually. Over time, it can reduce the cumulative tax benefit of routine annual giving, even though the charitable intent remains the same.
A modest benefit for those who take the standard deduction
For households that claim the standard deduction, 2026 brings a different adjustment. Under current law, taxpayers who do not itemize may be able to claim an above-the-line charitable deduction for 2026 and after, limited to $1,000 for individuals and $2,000 for married couples filing jointly. The IRS has not yet finalized how this deduction will be implemented, including which types of contributions qualify, and additional guidance is expected.
This provision allows some charitable giving to be recognized for tax purposes even when itemized deductions are not used. The benefit is intentionally limited and, provides acknowledgement rather than a primary planning opportunity.
What this means for planning conversations
Collectively, these changes encourage a closer look at how charitable giving is structured within a broader tax strategy. For some families, concentrating multiple years of planned contributions into a single year may make sense. This approach can limit the repeated impact of the adjusted gross income threshold and may also make it more advantageous to itemize deductions in that year. Donor advised funds are often used in this context, allowing a contribution to be made in a single year while grants to charities are distributed over time.
The choice of asset also matters. Donating long-term appreciated securities can reduce exposure to capital gains while supporting charitable goals. By contrast, contributing assets with unrealized losses is often less efficient than selling the asset, recognizing the loss and donating the proceeds in cash.
For individuals over age 70 1/2 , qualified charitable distributions from IRAs continue to provide a way to support charities while reducing taxable income directly, regardless of whether the standard deduction or itemized deductions are used.
A more intentional approach going forward
The 2026 rules do not change the role of philanthropy in your and your family’s financial planning. What they change is the margin. Small structural decisions now play a larger role in determining how charitable gifts affect a tax return. For some households, the difference may be modest. For others, particularly for those who give consistently over many years, the cumulative impact can be meaningful.
As charitable giving continues into 2026 and beyond, a more intentional approach can help ensure that generosity and tax efficiency remain aligned. The goal is not to change how much or why you or your family gives, but to ensure the way you give continues to work as effectively as it should.
As always, your Waldron team is available to answer questions or to review how these considerations may fit into your broader financial plan.
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