A new year is always a good time to revisit your charitable priorities, and this is especially important in 2026, as several new tax law changes may affect your philanthropic strategies. Here are a few items you can share with your tax advisor to understand how these updates may impact your giving strategy, along with ways your Philanthropy Team at the Sacramento Region Community Foundation can help you navigate them.
New minimum threshold for itemized charitable deductions
Beginning in 2026, charitable contributions are deductible only after they exceed 0.5% of a taxpayer’s adjusted gross income (AGI). For example, someone with an AGI of $200,000 will not receive a charitable deduction for the first $1,000 they give in a year. Only gifts above that amount may be deductible, subject to existing limits. In practical terms, smaller annual gifts may no longer provide a tax benefit for taxpayers who itemize, while larger gifts still may.
For donors who prefer to give steadily each year, this change may make it helpful to bundle or concentrate giving into certain years. A Donor Advised Fund or other charitable fund can allow you to make a larger gift in one year (when a deduction is more meaningful), while continuing to support nonprofits consistently over time.
Cap on the value of charitable deductions for high-income taxpayers
High-income taxpayers will also see a new cap on the value of charitable deductions. Even for donors in the highest tax brackets, the tax benefit of a charitable deduction will be limited to 35% of the contribution. As a result, donors in the 37% tax bracket will no longer receive a full offset at their marginal rate when making charitable gifts.
Keep in mind that while the tax benefit may be reduced, the community impact of your giving is not! Many area philanthropists are using this moment to align giving more closely with their values and long-term goals, such as investing in local solutions or establishing a Legacy Fund that supports the community beyond their lifetime. We can help you think strategically about how to do that.
60% AGI limit for cash gifts made permanent
One positive change brings greater certainty for donors making large cash contributions. The rule allowing cash gifts to qualified public charities to be deducted up to 60% of AGI has been made permanent. After meeting the new 0.5% AGI threshold, donors may continue to deduct cash contributions up to this level.
For donors considering significant gifts, the Foundation can serve as you trusted local partner, offering flexibility in how funds are structured, invested, and granted, while helping ensure your generosity has lasting impact in the causes and communities you care about most.
New charitable deduction for non-itemizers
For the first time in several years, taxpayers who take the standard deduction will again receive a tax benefit for charitable giving. Beginning in 2026, single filers may deduct up to $1,000 and married couples filing jointly may deduct up to $2,000. These deductions apply to cash gifts only and are taken “above the line,” meaning they reduce income before AGI is calculated.
While gifts to Donor Advised Funds and non-cash gifts are not eligible, gifts to many other types of charitable funds — including Nonprofit Funds, Scholarship Funds, and the Impact Fund — are eligible. We can help you identify giving options that both qualify for this deduction and align with the causes you care about, while still benefiting from our team’s local knowledge and stewardship.
Qualified Charitable Distributions (QCDs) become even more valuable
For taxpayers age 70½ and older, the annual limit for Qualified Charitable Distributions from IRAs will increase beginning in 2026. QCDs allow individuals to transfer funds directly from an IRA to a qualified charity without including the distribution in taxable income. These gifts can also count toward required minimum distributions and are not affected by itemized deduction limits, AGI floors, or deduction caps, making them an especially tax-efficient giving strategy.
We regularly work with donors and advisors to coordinate QCDs in ways that support multiple nonprofits, specific causes, or scholarships and others funds, all while keeping the process simple.
New limits on corporate charitable deductions
Corporate donors will also be affected by new rules. Beginning in 2026, corporations may deduct charitable contributions only to the extent they exceed 1% of taxable income. The existing 10% cap remains in place, and excess contributions may still be carried forward to future years. This change may influence giving strategies for businesses that make consistent but relatively modest charitable contributions.
Business owners increasingly turn to the Foundation to plan multi-year giving, align corporate and personal philanthropy, and create charitable structures that reflect their company’s values while remaining flexible as tax rules evolve. A branded Business Fund makes it easy.
We’re here to help
Because these changes affect donors differently, we recommend reviewing them with your tax advisor. When you’re ready, we’re always glad to partner with you and your advisors to explore giving strategies that continue to make a meaningful impact in our community.
Your Philanthropy Team
We’re here to help you give with confidence.
