The Tax Cuts and Jobs Act (TCJA), enacted in 2017, reshaped several aspects of individual tax planning, including charitable giving strategies. More recently, the One Big Beautiful Bill Act (OBBBA), enacted in July 2025, made several TCJA provisions permanent and introduced additional changes to deductions and credits, including new rules affecting charitable deductions and the state and local tax (SALT) deduction.
How 2026 Tax Rules Affect Charitable Giving
For 2026, the standard deduction is $32,200 for married couples filing jointly, $16,100 for single filers, and $24,150 for heads of households. As a result, many taxpayers may continue to claim the standard deduction rather than itemizing, making it important to understand the charitable giving opportunities available under both approaches.
In 2026, taxpayers who take the standard deduction may deduct up to $1,000 in qualifying cash charitable contributions, or $2,000 for married couples filing jointly. Taxpayers who itemize can continue to deduct qualifying charitable contributions, but a new 0.5% of Adjusted Gross Income (AGI) floor applies. This means only charitable contributions exceeding 0.5% of AGI are deductible.
The QCD Advantage
For clients age 70½ or older, Qualified Charitable Distributions (QCDs) may offer a valuable planning opportunity, whether or not you are subject to Required Minimum Distributions (RMDs) yet. In 2026, a QCD allows you to direct up to $111,000 annually from your IRA to a qualified charity, with the qualifying distribution excluded from taxable income. RMDs generally begin at age 73, although the starting age increases to 75 for individuals born in 1960 or later. QCDs, however, remain available beginning at age 70½.
In addition, the IRS permits individuals to make a one-time QCD through a split-interest entity. This lifetime election allows a donor to contribute up to $55,000 in 2026 to establish either a Charitable Remainder Unitrust (CRUT), a Charitable Remainder Annuity Trust (CRAT), or a Charitable Gift Annuity (CGA). This amount is adjusted annually by the IRS.
Here’s how it works: If your RMD for 2026 is $50,000 and you send $10,000 directly to a qualified charity via a QCD, the $10,000 can count toward satisfying your RMD, and only the remaining $40,000 is generally included in taxable income. This not only lowers your taxable income but may also reduce the impact on income-related Medicare premiums and Social Security taxation.
While QCDs have been around for years, they may be more relevant than ever, and some custodians allow check-writing directly from retirement accounts, which may help simplify the process.
Why QCDs May Be Especially Relevant in 2026
Changes to charitable deduction rules beginning in 2026 may cause taxpayers to take a closer look at how charitable gifts are structured. Unlike traditional charitable contributions, a qualifying QCD is excluded from taxable income rather than claimed as an itemized deduction. For eligible IRA owners, this distinction may provide benefits that are not affected by the new charitable deduction limitations while still supporting the organizations and causes they care about.
Other strategies, such as bundling donations into a donor-advised fund (DAF) or gifting appreciated assets, may also be worth considering depending on your circumstances. QCDs cannot be made to donor-advised funds, so determining which strategy is appropriate may depend on your age, income, assets, charitable goals, and overall financial plan.
Let’s Plan Together
If you’re considering charitable contributions, your advisor can help evaluate your options under current tax rules and implement a strategy that aligns with your values and financial goals within the context of your broader financial plan. Please reach out at any time.