2026 Federal Charitable Contribution Limits
There are some significant changes to the Charitable Contribution Limits starting in 2026. Granted, we don’t donate to good causes simply to receive a tax deduction, but it does help! For those who do not itemize deductions on their tax return, there will be a nice benefit of being able to deduct some charitable donations in addition to the standard deduction. For those who do itemize, there are some limits on deductions. As your Grand Junction CPA and tax accountant, I wanted you to know the changes that will affect you beginning in 2026.
What is changing?
The federal rules for 2026 differ depending on whether you claim the standard deduction or itemize your deductions.
- For those deducting Itemized Deduction (actual mortgage expense, taxes, medical expenses, charitable donations, etc. reported on Schedule A of the individual income tax return):
- New 0.5% AGI Floor: You can only deduct charitable contributions that exceed 0.5% of your Adjusted Gross Income (AGI). For example, if your AGI is $100,000, the first $500 of your donations is not deductible.
- Permanent 60% Cap: The 60% of AGI limit for cash contributions to public charities, which was previously temporary, is now permanent. For example, if your AGI is $100,000, then your total deductible cash charitable contribution is limited to $60,000 in that year. Any additional can be carried forward to be deducted in the following year or years.
- 35% Benefit Cap for High Earners: For taxpayers in the top 37% tax bracket, the tax benefit of itemized deductions (including charitable gifts) is effectively capped at 35%.
- For Non-Itemizers (Standard Deduction):
- Above-the-Line Deduction: Taxpayers taking the standard deduction can now claim a permanent deduction for cash contributions to qualifying charities.
- Deduction Limits: This is limited to $1,000 for single filers and $2,000 for married couples filing jointly.
What do you need to do?
- Please save your donation receipts for cash and non-cash donations.
- Cash includes cash, checks, credit card, etc. to a qualified charity.
- Non-cash would be a car to a charity, clothes or household goods to HopeWest or other type of qualified charity.
- Keep a look out for the Enterprise Zone Certificates and send those to us with your tax return information. These will give you an additional credit for Colorado.
- Provide the total of contributions to each charity to us with your tax return information. You may keep the receipts in your files.
- Provide the receipt for donations you made for non-cash donations; Goodwill, HopeWest, Habitat for Humanity all provide a signed receipt. Please list on the receipt the items you donated and the thrift store value of the items.
If you have any questions, please reach out. We are here to help make taxes more clear for you!
