Charitable Tax Law Changes for 2026: What to Review with Your Advisors

What new federal tax rules mean for your philanthropy in 2026.

At Community Foundation of Middle Tennessee, we serve as a long-term partner for all your giving goals. Whether your philanthropy spans many organizations, centers on a few local priorities, or includes collaborative investments in Middle Tennessee’s most pressing needs, we work alongside you and your advisors to help your generosity do the most good.

The start of a new year is a natural time to revisit charitable goals. In 2026, that review is especially timely. Several changes to federal tax law may affect how charitable gifts are treated, depending on your circumstances. Reviewing these updates with your tax advisors early in the year can help ensure your giving remains effective and aligned with your broader financial and estate plans.

Below is a summary of changes most likely to affect charitable giving. We encourage you to share this information with your CPA, attorney, or financial advisor to determine how it applies to your situation.

New cap on the value of itemized deductions for high-income taxpayers
A new limitation also affects high-income taxpayers who itemize. The value of charitable deductions is now capped at 35% of the contribution, even for taxpayers in the highest federal income tax bracket. As a result, donors in the 37% bracket will no longer offset income at their full marginal rate through charitable gifts.

Permanence of the 60% AGI limit for cash gifts

One positive development brings added certainty for donors making significant 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 floor, donors may continue to deduct cash contributions up to this limit. Non-cash gifts and contributions to certain organizations remain subject to lower caps. While other rules have tightened, this change preserves flexibility for major philanthropy.

New floor on corporate charitable deductions

Corporate donors will also see changes. Starting in 2026, corporations may deduct charitable contributions only to the extent they exceed 1% of taxable income. Contributions below that threshold will not generate a current-year deduction, though amounts exceeding applicable limits may be carried forward. The existing 10% cap on corporate deductions remains in place.

This new floor may influence how businesses structure ongoing charitable support.

Expanded Qualified Charitable Distributions (QCDs)

Qualified Charitable Distributions become even more valuable under the new law. Beginning in 2026, the annual amount that individuals age 70½ and older may transfer directly from an IRA to a qualified charity increases.

Because QCDs are excluded from taxable income and may count toward required minimum distributions, they remain unaffected by itemized deduction limits, AGI floors, or deduction caps. For many retirees, this remains one of the most tax-efficient ways to give.

New threshold for itemized charitable deductions
Beginning in 2026, charitable contributions are deductible for taxpayers who itemize only to the extent they exceed 0.5% of adjusted gross income (AGI). This effectively creates a “floor” before a charitable deduction is realized.

For example, a taxpayer with $200,000 in AGI would not receive a deduction for the first $1,000 of charitable giving in a given year. Only contributions above that amount may be deductible, subject to existing percentage-of-income limits. For some itemizers, this change may reduce the immediate tax benefit of smaller annual gifts.

A Coordinated Approach

We encourage you to review these changes with your tax advisors and invite them to include us in the conversation. Our role is to work alongside your attorney, CPA, and financial advisor to help ensure your charitable strategies support your goals for 2026 while aligning with your overall tax, financial, and estate planning objectives.

Whether you include us in an email, ask an advisor to reach out directly, or schedule a brief call, we are glad to be part of the discussion.

Get Started Now: Your 2026 Charitable Giving Checklist

Many donors begin the year wanting to be more intentional about their charitable giving. They may have clear values and a desire to make a difference, but less clarity about where to begin. A few thoughtful steps early in the year can bring focus and confidence to your giving.

Review your 2025 charitable contributions with your relationship manager at CFMT.
Looking back at last year’s giving can help identify patterns, highlight impact, and surface new opportunities. CFMT can help connect your past giving to community outcomes and support planning for the year ahead, whether that means refining priorities, adjusting gift amounts, or exploring additional charitable vehicles.
Talk with your tax advisors early about how the new tax laws may affect you.
Charitable giving is closely connected to tax and estate planning. Early conversations allow time to consider options before the year is underway. This may also be a good moment to revisit estate plans and beneficiary designations, including gifts to donor-advised or other funds at CFMT that support long-term charitable goals.
Set goals for your charitable involvement in 2026.
Intentional planning allows you to move from reactive giving to a more thoughtful approach. Our team can help you learn about community needs, explore organizations aligned with your interests, and plan the timing and structure of gifts throughout the year.

As you look ahead, you do not have to navigate charitable planning alone. CFMT is here to serve as a trusted partner, whether you are just getting started, refining an existing plan, or thinking about the legacy you want to leave. We invite you to reach out anytime to ask questions, explore ideas, or take the next step in your giving.