1. Larger Universal Charitable Deduction
In 2026, non-itemizing taxpayers may deduct up to $1,000 in charitable gifts ($2,000 for married couples filing jointly). Charitable deductions will no longer be limited only to those who itemize, allowing more donors, particularly those who take the standard deduction, to benefit from the generosity of their giving. This change makes charitable support more accessible and rewarding for a broader group of individuals and families.  

Note: This deduction applies only to cash gifts to public charities and excludes gifts to donor-advised funds or private foundations.

‍2. New Thresholds for Itemized Charitable Deductions
For taxpayers who itemize deductions, a new “floor” will apply starting in 2026. Charitable contribution deductions will be reduced by an amount equal to 0.5% of adjusted gross income (AGI). For example, with an AGI of $200,000, the first $1,000 of charitable contributions would not be deductible; only gifts above that level would qualify for a tax benefit. Some high-income itemizers also face a "cap" on the value of itemized deductions at 35% of AGI (instead of 37% in 2025).

While this change may affect the timing or structure of their giving, thoughtful planning can help donors continue to give in ways that align with their values and financial goals.

‍3. Estate & Gift Tax Exemption Increases
The federal estate and gift tax exemption will increase to $15 million per individual (indexed for inflation), meaning that fewer estates will be subject to federal estate tax. However, several states maintain significantly lower exemption thresholds.  

For donors with larger estates or long-term philanthropic goals, legacy and planned giving can remain an effective way to steward assets, provide for loved ones, and support causes that matter most.

‍4. Qualified Charitable Distributions (QCDs)—Updated Annual Limits
For individuals age 70½ and older, Qualified Charitable Distributions (QCDs) continue to allow donors to give directly from a traditional IRA to qualified charities, potentially reducing taxable income while supporting the causes most important to them. QCDs may also count toward satisfying Required Minimum Distributions (RMDs) beginning at age 73.

Under the updated tax provisions, the IRS now permits up to $111,000 per person annually in QCDs, with married couples able to give up to $222,000 if each spouse maximizes their own IRA limit. These limits have been indexed for inflation beginning in 2026, expanding opportunities for donors to integrate charitable giving into their retirement and tax planning strategies.

‍What This Means for Giving in 2026

Giving through a will, trust, IRA, or by making lifetime gifts of appreciated assets continues to be a powerful and flexible way to support your favorite nonprofit while addressing tax and estate planning considerations. These strategies may offer opportunities to maximize charitable impact while aligning with broader financial and legacy goals.

For more detailed information or to discuss which planned giving options may be most appropriate for your situation, we encourage you to consult with your tax or estate advisor.  

In addition, The Catholic Foundation of Greater Philadelphia is here to serve as a trusted charitable resource—working alongside you and your advisors to help answer questions, explain options, and support you in making informed, faith-centered decisions about your giving, now and for generations to come.

The information here is provided for educational purposes only and is not intended to provide, and should not be construed as providing legal or tax advice. This information is general in nature and is not intended to serve as the primary or sole basis for investment or tax-planning decisions

Garrett Owen
Chief Philanthropy Officer
The Catholic Foundation of Greater Philadelphia

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