People give hundreds of billions of dollars to charity each year,1 offering financial support to organizations that do critical work addressing poverty, health, education, disaster relief, and more.
Charitable giving can make you feel good about supporting causes you care about, and it can also have important tax benefits. The tax act known as the One Big Beautiful Bill Act made some important changes to the tax provisions for charitable contributions, introducing new considerations for both itemizers and non-itemizers.
While the law was enacted in 2025, several important changes to charitable-giving tax rules are taking effect for the first time in the current 2026 tax year. This includes 3 provisions that could significantly influence decisions on charitable giving strategies, offering both expanded opportunities and important considerations for donors to think about.
Here’s a look at the 3 changes.
New tax provisions introduced by the tax law
1. Charitable deductions for non-itemizers. Beginning with the 2026 tax year, a reinstated deduction allows non-itemizers to deduct cash donations to charity—up to $1,000 for single filers or $2,000 for married couples filing jointly. This provision is permanent and is not indexed for future inflation. Further, some types of donations are ineligible for the deduction, including those to donor-advised funds or private non-operating foundations.
This change could potentially encourage people who take the standard deduction to make charitable contributions, or to claim a deduction for charitable donations they may already be making, for example to support a friend or loved one’s fundraising efforts.
2. New floor on deductions for itemizers. Effective for the 2026 tax year, itemizers who make charitable donations will only be able to claim a tax deduction to the extent that their charitable contributions exceed 0.5% of their adjusted gross income (AGI). In other words, only the portion of a taxpayer's aggregate charitable contributions that exceed 0.5% of their AGI may be claimed.2
For example, a couple with an AGI of $300,000 could only deduct aggregate charitable donations in excess of $1,500.
High-income individuals who itemize deductions might want to consider the timing and amounts of their giving, and the strategies to maximize their deduction. For instance, a bunching strategy, or an approach of making larger gifts with less frequency, could potentially be more effective under the new rules.
3. New limits to deductions for itemizers in the top tax bracket. Also starting in the 2026 tax year, the legislation caps the tax benefits of itemized charitable deductions at 35% for those in the 37% marginal tax bracket.
In other words, a high-income individual filer with a hypothetical AGI of $1 million who donates $20,000 would find that, due to the 0.5% floor, $5,000 would not be deductible. The tax savings inclusive of the impact from both the itemization cap and the floor would be reduced in value to $5,250 from $7,400, had the provisions not been in effect. Note: The deduction for high-income filers applies to itemized deductions only, not the cash donations of $1,000 for single filers and $2,000 for married joint filers who do not itemize, mentioned above.
Donors in higher tax brackets who itemize and are considering a philanthropic gift may want to work with a tax professional who can help them evaluate charitable gifting strategies, such as bunching, which can help get the maximum tax savings out of typically smaller annual charitable donations.
Key takeaways and considerations
In light of the tax law changes, donors should take a fresh look at their charitable giving strategies to ensure they are maximizing both impact and tax efficiency. The introduction of the charitable deduction for non-itemizers may expand participation in giving, while high-income donors may face reduced value from charitable deductions. All of this could make it particularly important to have a strategy for charitable contributions, in 2026 and beyond. Donors and their advisors should consider:
- Timing of contributions: Using a bunching strategy may yield greater tax savings. A donor-advised fund, like the Fidelity Charitable® Giving Account®, may be worth considering for this purpose.
- Planning ahead: Those who do not itemize may want to consider cash charitable donations for the 2026 tax year, to take advantage of the charitable deductions for non-itemizers.
- Thinking beyond cash: Non-cash gifts such as appreciated securities held for more than 1 year may help maximize charitable impact by potentially reducing capital gains taxes and increasing the value donated to the charity.3
Also consider working with a trusted financial professional. Donors should engage with a tax professional or financial advisor to tailor a plan that aligns with their values and goals.