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These updates, enacted under the One Big Beautiful Bill Act (OBBBA), reshape how—and how much—charitable contributions deliver tax benefits. While the intention is to broaden participation in philanthropy, the new framework alters planning considerations for both itemizers and non itemizers. 

A New Deduction for Non Itemizers

For the first time since the pandemic-era provisions expired, taxpayers who take the standard deduction may again receive a tax benefit for charitable giving. Beginning in 2026, non itemizers can deduct up to $1,000 in cash contributions ($2,000 for married couples filing jointly) as an above the line deduction. Only cash gifts to qualified public charities are eligible; contributions to donor advised funds, private foundations, and non cash gifts do not qualify.

This change is designed to encourage broader participation in charitable giving, particularly among households that no longer itemize under today’s higher standard deduction.

A New AGI Floor for Itemized Deductions

For taxpayers who itemize, charitable deductions are now subject to a 0.5% of Adjusted Gross Income (AGI) floor. In practical terms, only the portion of charitable contributions that exceeds 0.5% of AGI is deductible. For example, a taxpayer with $200,000 of AGI must give more than $1,000 before any charitable deduction begins to generate tax benefit.

This change reduces the value of smaller annual gifts for itemizers and may push donors toward higher concentration or more strategic giving approaches.

Qualified Charitable Distributions

Qualified Charitable Distributions continue to stand out in 2026 as one of the most tax efficient ways for older donors to give—particularly in light of the new AGI floor on itemized deductions and the expanded standard deduction.

Beginning in 2026, the annual limit for Qualified Charitable Distributions is $111,000 per individual, indexed for inflation under the SECURE 2.0 Act. Each spouse with their own IRA may make a QCD up to this amount, allowing married couples to transfer as much as $222,000 directly to charity in a single tax year.

To qualify, the distribution must (1) be made directly from an IRA to an eligible public charity; (2) occur after the donor reaches age 70½; and (3) exclude donor advised funds, private foundations, and supporting organizations.
 

As before, QCDs count toward Required Minimum Distributions (RMDs) once RMDs begin, but eligibility to make a QCD still starts at age 70½—even though the RMD age is now higher.

SECURE 2.0 also permits a one time Qualified Charitable Distribution to fund certain split interest charitable vehicles. For 2026, the inflation adjusted limit for this special election is $55,000 per donor. This one time distribution may be used to establish: a Charitable Gift Annuity (CGA), a Charitable Remainder Unitrust (CRUT), or a Charitable Remainder Annuity Trust (CRAT). The election may be used only once per lifetime and must be completed in a single tax year. The income stream may benefit only the donor, the donor’s spouse, or both.

Unlike charitable deductions, QCDs are excluded from income entirely. This means they bypass the new 0.5% AGI floor, remain effective for taxpayers taking the standard deduction, and can help manage adjusted gross income—often reducing Medicare premium surcharges and limiting the taxation of Social Security benefits.  

Planning Implications

Taken together, these provisions change the calculus of charitable giving in several ways. Smaller gifts may no longer produce incremental tax benefit for itemizers, while modest donors who use the standard deduction may now see one for the first time. As a result, gift timing, aggregation strategies, and tax efficient vehicles such as Qualified Charitable Distributions (QCDs) are likely to play a larger role in thoughtful philanthropy planning in 2026 and beyond.

Information contained in this piece is for the general education and knowledge of our readers. It is not designed to be a substitute for professional tax or legal advice.