Charitable Giving Tax Changes for 2026

At the Community Foundation for Muskegon County, we’re honored to be your partner in charitable giving. Whether you support many nonprofits, focus on a few causes close to your heart, or work with us to address the area’s greatest needs, we are here to support you.

There are several tax law changes for 2026 that may affect how philanthropy fits into your overall financial picture. We encourage you to review the updates below and share them with your tax advisors.

1. New incentive for donors who do not itemize

• Beginning in 2026, taxpayers who take the standard deduction may also claim a limited charitable deduction that reduces income before adjusted gross income is calculated.

• Single filers may deduct up to $1,000 and married couples filing jointly up to $2,000 for cash/check/credit card gifts. This is in addition to the standard deduction.

• Gifts to Donor Advised Funds and noncash contributions do not qualify for this deduction. However, DAFs and gifts of appreciated assets remain valuable tools for donors seeking flexibility and long-term impact.

2. Qualified Charitable Distributions (QCDs) may be even more valuable

• In 2026, individuals age 70½ and older may transfer up to $111,000 per year (up from $108,000 in 2025) from an IRA directly to a qualified charity.

• QCDs are excluded from taxable income and may count toward IRA Required Minimum Distributions. They are not affected by itemized deduction limits, income thresholds, or deduction caps, making them a highly tax-efficient giving option.

3. New threshold for itemized charitable deductions

• For taxpayers who itemize, charitable contributions are deductible only to the extent they exceed 0.5% of adjusted gross income.

• For example, someone with $200,000 in adjusted gross income would not receive a deduction for the first $1,000 of charitable gifts. Only amounts above that threshold may be deductible, subject to existing limits.

4. New limits for high-income taxpayers who itemize

• High-income taxpayers will also face a new cap: the tax benefit of charitable deductions will be limited to 35% of the gift.

• Taxpayers in the highest 37% bracket will no longer offset income at their full marginal rate when making charitable contributions.

5. Positive news for the 60% cash gift limit

• There is good news for donors who make significant cash gifts. The rule allowing deductions of up to 60% of adjusted gross income for cash gifts to qualified public charities has been made permanent.

• After meeting the new 0.5% threshold, donors may continue to deduct cash contributions up to this level. This provides long-term certainty for donors planning larger gifts.

6. Changes affecting corporate charitable deductions

• Beginning in 2026, corporations may deduct charitable contributions only to the extent they exceed 1% of taxable income.

• Gifts below that threshold will not generate a current-year deduction, though excess amounts may be carried forward. The existing 10% cap on corporate charitable deductions remains in place.

Let’s work together

We encourage you to include the Community Foundation in conversations with your CPA, financial advisor, or attorney as you plan for 2026 and beyond. We are happy to collaborate to ensure your charitable plans support your personal, financial, and estate planning goals.

Whether you copy us in an email or bring everyone together for a quick call, we are part of your team and are here for you. It is our honor to partner with you to ensure your generosity continues to make a lasting difference in the community we love.

To learn more or begin the conversation, contact development@muskegonfoundation.org.