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October 28, 20265 min read

Charitable Giving Under the 2026 Tax Rules: What Changed and What It Means for Your Retirement Plan

By Gregory S. DuPont, JD, CFP

Starting with 2026, the federal rules governing charitable giving tax deductions changed in several ways that directly affect people in their sixties and seventies. Some households will gain a deduction they haven't had in recent years. Others will find that part of their giving no longer counts toward their tax return at all. These changes came with the broader tax law passed in 2025, which we cover in our guide to the One Big Beautiful Bill Act.

This article explains those federal rules and where IRA charitable giving strategies fit into a broader retirement plan.

To make the rules concrete, I'll use the Yamadas, a composite and not a real family. They are both 72, itemize their deductions, own a taxable brokerage account and traditional IRAs, and give to several charities each year.

Which assets should you donate: cash or appreciated stock?

Shares held more than one year and given to a public charity are generally deductible at fair market value, and the gain is not taxed to the giver. This makes appreciated stock one of the more tax-efficient charitable giving options available to itemizers. For a look at other ways to manage gains, see How to Defer and Reduce Capital Gains Taxes on Investments.

The deduction for this kind of gift is generally limited to 30% of adjusted gross income (AGI), with any extra carried forward up to five years, according to IRS Publication 526 (opens a separate site in a new tab).

For the Yamadas, shares bought for $4,000 and now worth $20,000 could be given instead of cash. That approach has constraints. It helps only if they itemize. It changes their portfolio's makeup, which may need rebalancing afterward. Shares that have lost value are usually better sold first so the loss can be claimed, with the cash proceeds donated instead.

Noncash gifts over $500 require Form 8283 (opens a separate site in a new tab) with the return.

What are the new 2026 charitable deduction rules?

Starting with the 2026 tax year, three changes apply, and one long-standing requirement still matters:

  • Itemizers can now deduct charitable gifts only to the extent they exceed 0.5% of AGI, per IRS Publication 505 (opens a separate site in a new tab). A separate rule limits the tax benefit of itemized deductions to about 35 cents per dollar for people in the top 37% bracket.
  • People who don't itemize can deduct up to $1,000 of cash gifts for 2026, or $2,000 on a joint return. This is a new above-the-line option for non-itemizers, described in IRS Topic No. 506 (opens a separate site in a new tab). It covers cash gifts only, and gifts to donor-advised funds don't qualify.
  • Whatever the tool used, a single gift of $250 or more requires a written acknowledgment from the charity, received by the date you file or the filing deadline including extensions, whichever comes first. If you receive something in return for a gift, the deduction is generally reduced by its value. Both points are covered in IRS Publication 526 (opens a separate site in a new tab).

Each of these rules has limits, and the tax outcome depends on the whole return. A tool that reduces income on paper does not necessarily reduce the total tax owed. Itemized gifts are reported on Schedule A (opens a separate site in a new tab).

How do IRA qualified charitable distributions (QCDs) work in 2026?

A qualified charitable distribution (QCD) is a transfer made directly from an IRA to a qualified charity. QCDs are available starting at age 70½ and are excluded from income rather than deducted, which can be more valuable than a traditional deduction for some retirees. The IRS explains the mechanics in Publication 590-B (opens a separate site in a new tab). For 2026, the limit is $111,000 per IRA owner, as set out in the IRS cost-of-living adjustments for 2026 (opens a separate site in a new tab). QCDs cannot go to donor-advised funds.

The Yamadas are 72, so QCDs are available to them now. Their required minimum distributions (RMDs) don't begin until age 73, since they were born after 1950 and before 1960. Once RMDs begin, a QCD made in an RMD year counts toward the required amount, which is one reason QCDs are a widely used strategy among retirees who must take distributions whether they need the income or not. The IRS covers the timing rules in its RMD FAQs (opens a separate site in a new tab), and we cover why the years before RMDs matter in The Retirement Tax Planning Window Before RMDs.

For a closer look at how a direct IRA gift interacts with income measures and Medicare surcharges, read Charitable Transfer as a Tax and Estate Planning Tool.

Estate planning documents should match your charitable intentions

Lifetime giving and giving at death are different decisions, but they're worth planning together. A will or trust that carries charitable gifts at death should coordinate with your financial plan, and with the rest of your estate and legacy planning.

For the Yamadas, this meant confirming that the charities named in their documents were accurate, that the amounts still made sense next to what they may need for their own care, and that each gift sits in a document that will actually control the assets meant to fund it.

Frequently Asked Questions

Can you deduct a QCD as a charitable contribution?

No. A QCD is excluded from taxable income rather than claimed as an itemized deduction, so it isn't reported as a charitable gift on Schedule A. For some retirees, this exclusion is more valuable than a deduction would be.

Does the 0.5% of AGI floor apply to every charitable gift?

Yes, starting with 2026, itemizers can only deduct charitable gifts to the extent they exceed 0.5% of AGI. This floor applies before the separate 35-cents-per-dollar limit on itemized deduction value for top-bracket filers.

Can a QCD be used to satisfy a required minimum distribution?

Yes. Once RMDs begin, a QCD made during that year counts toward the required amount, which is one reason many retirees use QCDs once they reach RMD age.

A Next Step

If seeing how charitable giving fits your overall plan is worth a conversation, the place to start is a Clarity Map Session: 30 minutes, no cost, no obligation. It covers where your income actually comes from, what the IRS is owed and when, and whether your plan can last as long as you live. You keep the map whether you decide to work with us or not.

Sources and as-of dates

Educational information only, not legal, tax, or investment advice, and not a guarantee of any particular outcome. Tax rules change and every household is different; talk with your own tax professional and attorney about your situation. Advocate Wealth Solutions is a registered investment adviser.

Published October 28, 2026. Tax law, contribution limits and thresholds change, so read any figure here as of its stated date. None of it is advice about your own situation. Advocate Wealth Solutions is a fee-based planning firm in Dublin, Ohio, and a Clarity Map Session is where questions about your own accounts get answered.

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