Charitable Giving for High Earners: The New 2026 Rules

The short answer: giving to charity still saves high earners tax in 2026, but a little less per dollar than before, and how you give matters more than ever. The 2025 tax law added a floor that every itemizer pays before any gift is deductible, and a limit that shaves the value of itemized deductions for people in the top bracket. The good news is that the best charitable strategies, giving appreciated stock, using a donor-advised fund, giving straight from an IRA after 70½, and charitable remainder trusts, still work well. Some work even better under the new rules.

What changed starting in 2026

Four changes from the 2025 tax law (Public Law 119-21) apply to tax years beginning in 2026:

• A 0.5% of AGI floor for itemizers. If you itemize, you can deduct only the charitable gifts that exceed 0.5% of your adjusted gross income. At $1 million of AGI, the first $5,000 of gifts each year isn’t deductible.
• A limit for the 37% bracket. Itemized deductions are reduced by 5.4% (2/37) of the smaller of your total itemized deductions or the amount your taxable income exceeds $768,700 for married couples filing jointly ($640,600 for single filers), the level where the 37% bracket starts in 2026. For someone fully in the top bracket, each dollar of itemized deductions saves roughly 35 cents of federal tax instead of 37. This applies to all itemized deductions, not just gifts.
• A deduction for non-itemizers. If you take the standard deduction, you can deduct up to $1,000 of cash gifts to qualifying charities, or $2,000 on a joint return. Gifts to donor-advised funds and supporting organizations don’t qualify, and neither do gifts of stock or other property.
• A 1% floor for C corporations. A C corporation can deduct only the charitable gifts that exceed 1% of its taxable income, and still no more than 10%. Gifts above the 10% limit can be carried forward up to five years.

If you own an S corporation or a partnership, the business’s gifts pass through to your personal return, where the individual rules above apply. Business-level and personal results should be tracked separately.

What the new rules mean for a high earner

Picture a hypothetical married couple with $1 million of AGI, well into the 37% bracket, who give $50,000 in cash this year:

• The 0.5% floor removes the first $5,000, so $45,000 counts toward their itemized deductions.
• At roughly 35 cents per dollar, that $45,000 saves about $15,750 of federal tax.
• Under the rules before 2026, with no floor and the full 37% rate, the same $50,000 would have saved about $18,500.

Generosity still pays, but the way you fund the gift now does more of the work. Oklahoma tax is figured separately.

Strategy 1: Give appreciated stock instead of cash

When you give stock or funds you’ve held more than a year directly to a public charity or donor-advised fund, you can generally deduct the full market value and never pay capital gains tax on the growth. If the couple above gave $50,000 of stock they bought for $10,000, they would also avoid federal tax on a $40,000 gain: about $9,520 at the 20% capital gains rate plus the 3.8% net investment income tax. That benefit doesn’t depend on the new floor or the 35-cent limit, which makes stock the first place to look.

Gifts of appreciated stock to public charities are generally deductible up to 30% of AGI, with any excess carried forward up to five years. Our guide to donating appreciated stock covers the mechanics.

Strategy 2: Use a donor-advised fund to bunch future gifts

The new floor is charged every year you itemize gifts. Giving several years’ worth in one year means paying the floor once instead of several times, and it can also make itemizing worthwhile when yearly gifts alone wouldn’t beat the 2026 standard deduction of $32,200 for married couples. A donor-advised fund lets you take the deduction in the year you contribute, then recommend grants to your charities over the following years.

Two points for 2026 and later. First, for someone in the 37% bracket, the new limit applies in every year, so bunching is mainly about the floor and the standard deduction, not a higher rate in one year. Second, in the years you take the standard deduction, you can still claim up to $1,000 ($2,000 joint) for cash gifts made directly to operating charities, though not to the fund. See donor-advised fund bunching for how the numbers work.

Strategy 3: Qualified charitable distributions after 70½

If you’re 70½ or older, you can have your IRA trustee send money directly to a charity. A qualified charitable distribution (QCD) isn’t deducted; it’s left out of your income entirely. For 2026, each IRA owner can exclude up to $111,000, and a QCD counts toward your required minimum distribution.

Because a QCD is excluded from income instead of deducted, the 0.5% floor and the itemized deduction limit don’t reduce it, and it keeps your AGI lower. A QCD can’t go to a donor-advised fund or a supporting organization. There is also a one-time option to direct up to $55,000 for 2026 to a split-interest entity, such as a charitable remainder trust or charitable gift annuity.

Strategy 4: Charitable remainder trusts for large, low-basis assets

If you hold stock, real estate, or a business interest with a large built-in gain, a charitable remainder trust can sell it without paying income tax at the sale, because the trust itself is generally exempt from income tax. The trust pays you (and your spouse, if you choose) between 5% and 50% of its value each year for life or a term of up to 20 years, and charity receives what remains. The value going to charity must be at least 10% of what you put in.

You pay tax on the payments as you receive them, with ordinary income coming out first, then capital gain. Your upfront deduction is the present value of the charity’s remainder, and it is an itemized deduction, so the 2026 floor and limit apply to it. Our page on the charitable remainder trust shows a full side-by-side.

How we help

At Cannon & Brown Tax Advisors, charitable planning is part of a year-round tax plan. We look at which assets to give, whether bunching or a donor-advised fund fits, and how the new floor and limit affect your numbers, keeping personal and business tax separate. Our technology keeps your numbers current, and your tax strategist reviews every recommendation. If you’d like to see how your giving fits the 2026 rules, start with a free tax analysis.

Illustrative example. The people and figures in this article are hypothetical, used to explain how the rules work. They are not a client and not a promise of results.

This article is educational and is not tax advice for your situation. Tax law may change, which may change these rules and numbers.

Sources

• IRS: Publication 505 (2026), Tax Withholding and Estimated Tax
• IRS: One, Big, Beautiful Bill provisions
• IRS: Understanding the Working Families Tax Cuts, business tax provisions (video script)
• IRS: Revenue Procedure 2025-32 (2026 tax brackets)
• IRS: Internal Revenue Bulletin 2025-49, Notice 2025-67 (2026 QCD limits)
• IRS: Publication 590-B, Distributions from IRAs
• 26 U.S.C. § 408(d)(8), qualified charitable distributions (Cornell LII)
• IRS: Publication 526, Charitable Contributions
• IRS: Charitable remainder trusts
• 26 U.S.C. § 664, charitable remainder trusts (Cornell LII)
• IRS: Instructions for Form 1120-S
• IRS: Topic 409, Capital gains and losses