New Tax Rules Are Changing How Americans Give to Charity in 2026

Here's What You Need to Know

By: Logan Pettus of Sweeney Financial Advisors

If you give to charity, a new federal law is about to change how much of that generosity comes back to you at tax time.

The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, rewrites several of the rules around charitable deductions starting in the 2026 tax year. Some of these changes are good news for everyday donors, while others mean high-income givers will need to plan more carefully. Here's a quick breakdown of what's changing and what it might mean for you and your plan.

Good News If You Take The Standard Deduction

For years, only taxpayers who itemized their deductions could write off charitable gifts, and itemizers have recently been a minority. It’s estimated that nearly 86% of taxpayers take the standard deduction and, until now, they have not received a federal tax benefit for their charitable giving.

With the changes in 2026, taxpayers who don't itemize can now deduct cash donations to qualifying public charities directly up to $1,000 for individuals and $2,000 for married couples filing jointly. Below are a few things to keep in mind:

• •This deduction applies to cash gifts only.
• •Donations to donor-advised funds and certain private foundations don't qualify.
• •The cap isn't tied to inflation, so it will stay fixed unless Congress changes it again.

A New Hurdle For Itemizers

If you do itemize, the picture isn’t as straightforward. Starting in 2026, charitable deductions are only counted once your total giving exceeds 0.5% of your adjusted gross income (AGI). Everything below that threshold simply doesn't count.

For example, a couple with $200,000 in AGI would need to give more than $1,000 in a year before any of it becomes deductible.

On top of that, the tax value of charitable deductions for top-bracket filers (37%) is now capped at 35%. In hypothetical terms, a $10,000 donation that used to save a high earner $3,700 in taxes now saves closer to $3,500.

However, the ability to deduct cash gifts up to 60% of AGI to public charities has been made permanent, which offers more certainty for donors who give each year generously.²

Looking Ahead: A New School Credit

Starting in 2027, donors who give cash to qualifying K-12 scholarship-granting organizations can claim a nonrefundable federal tax credit of up to $1,700 per taxpayer, available whether or not you itemize. Unused credit can be carried forward for up to five years.

What This Means For You

• •If you don't itemize, this is the first time in years your everyday giving can pay off on your tax return with no extra paperwork gymnastics required.
• •If you itemize, timing matters more than ever. Strategies like "bunching" several years of donations into one tax year, or giving appreciated stock instead of cash, can help you clear the new AGI floor and maximize your deduction.
• •If you're a high-income donor, the reduced deduction value and new floor make it worth reviewing your giving plan with a professional before year-end.

Let’s Build Your Giving Plan Together

Tax law changes like this can feel overwhelming, but you don't have to figure it out alone. At Sweeney Financial Advisors, we'll sit down with you and your CPA, look at your income, your giving history, and your goals, and recommend a plan that makes the most sense for your unique situation. Reach out to a member of our team to begin the discussion on what giving means to you and your financial plan.