What your 2026 gifts to charity save in federal tax under the 2025 tax law
Updated October 2026
1. Non-itemizers. Section 170(p), as amended by section 70424 of P.L. 119-21, allows a deduction “not in excess of $1,000 ($2,000 in the case of a joint return)” for cash gifts to public charities, on top of the standard deduction. Gifts to a donor-advised fund or a supporting organization do not count, and the 0.5% floor does not apply to this deduction.
2. Itemizers. New section 170(b)(1)(I) allows charitable gifts “only to the extent that the aggregate of such contributions exceeds 0.5 percent of the taxpayer’s contribution base.” For most people the contribution base is AGI, so at $150,000 of AGI the first $750 of gifts is not deductible. Cash gifts are still limited to 60% of AGI.
3. The 35% cap. Rewritten section 68 reduces itemized deductions by 2/37 of the lesser of the deductions or the amount by which taxable income plus those deductions exceeds the start of the 37% bracket. In the 37% bracket, each deducted dollar saves 35 cents instead of 37.
Worked example. A married couple with $150,000 of AGI, $3,000 of cash gifts and $20,000 of other itemized deductions. Itemizing gives $20,000 + ($3,000 − $750) = $22,250, below the $32,200 standard deduction. So they take the standard deduction plus the $2,000 non-itemizer deduction. Taxable income falls from $117,800 to $115,800, saving 22% × $2,000 = $440.
| Rule (P.L. 119-21) | 2026 amount | Who it affects |
|---|---|---|
| Non-itemizer deduction, IRC 170(p) | Up to $1,000; $2,000 joint; cash to public charities only | Anyone taking the standard deduction |
| 0.5% floor, IRC 170(b)(1)(I) | First 0.5% of AGI of gifts not deductible | Itemizers |
| Cash limit, IRC 170(b)(1)(G) | 60% of AGI, now permanent | Very large givers |
| Itemized deduction limit, IRC 68 | Reduced by 2/37; worth 35% at most | Taxable income in the 37% bracket ($640,600 single, $768,700 joint) |
| Standard deduction (Rev. Proc. 2025-32) | $16,100 single, $32,200 joint, $24,150 head of household | Everyone who does not itemize |
All of these apply to taxable years beginning after December 31, 2025, so they first show up on 2026 returns filed in 2027.
Enter AGI from your expected 2026 return, cash gifts (checks, cards, payroll deduction), and the other itemized deductions you would claim after their own limits: state and local taxes up to the SALT cap, mortgage interest and medical costs above 7.5% of AGI. The calculator compares itemizing with the standard deduction plus the non-itemizer deduction and picks the lower tax.
| Household (2026) | Better choice | Charity deduction | Tax saved | Saved per dollar given |
|---|---|---|---|---|
| Married, $150,000 AGI, $3,000 cash, $20,000 other itemized | Standard + non-itemizer deduction | $2,000 | $440 | 15% |
| Same couple, gifts to a donor-advised fund | Standard + non-itemizer deduction | $0 | $0 | 0% |
| Single, $60,000 AGI, $800 cash, no other itemized | Standard + non-itemizer deduction | $800 | $96 | 12% |
| Married, $300,000 AGI, $20,000 cash, $30,000 other itemized | Itemize | $18,500 | $3,912 | 20% |
| Single, $1,000,000 AGI, $100,000 cash, $40,000 other itemized | Itemize | $95,000 | $33,250 | 33% |
The $300,000 couple saves about 20 cents per dollar: $1,500 of their $20,000 is lost to the 0.5% floor and another $2,200 only lifts their itemized total up to the standard deduction, so $16,300 saves 24%. The $1,000,000 single filer saves exactly 35% of the $95,000 deducted, the cap in section 68.
The floor and the new non-itemizer deduction change the math on bunching two or three years of gifts into one year. Bunching still helps a household near the standard deduction, but each bunched year now loses 0.5% of AGI, and the years in between can use the $1,000 or $2,000 deduction, though not for gifts to a donor-advised fund. Qualified charitable distributions from an IRA at 70½ or older are excluded from income instead of deducted, so neither the floor nor the cap touches them.
Gifts of property (stock, real estate, goods) and their 30% and 20% limits, carryforwards of excess gifts, gifts to private foundations, business gifts by corporations (which face their own new 1% floor), state income tax, and other 2026 deductions that sit outside itemizing, such as the deduction for seniors. It treats AGI as the contribution base.
Assuming the $2,000 covers a donor-advised fund. It does not. Forgetting the 0.5% floor when estimating an itemized deduction: at $400,000 of AGI the first $2,000 of gifts saves nothing. Expecting 37% savings in the top bracket; section 68 caps it at 35%. Counting noncash items toward the non-itemizer deduction, which is cash only. Missing receipts: any single gift of $250 or more needs a written acknowledgment from the charity.