2026 Charitable Tax Law Changes

Beginning January 1, 2026, several changes to the federal tax code will take effect under recently passed legislation. These changes may influence how donors plan and time their charitable giving. While Longs Peak Hospital Foundation cannot offer tax or legal advice, we want to ensure you have the information you need to have informed conversations with your advisors.

Below is a high-level overview of key changes, along with considerations you may wish to discuss with your tax or financial professional.

Key Changes for 2026

1. Universal Charitable Deduction for Standard Filers

For the first time in many years, donors who take the standard deduction may claim a limited charitable deduction:

  • Up to $1,000 for single filers
  • Up to $2,000 for joint filers

(Some gifts, such as those to donor-advised funds or private non-operating foundations, are not eligible.)

Who may be affected: Households that take the standard deduction.

2. New 0.5% Deduction “Floor” for Itemizers

Beginning in 2026, itemizers will no longer be able to deduct the first 0.5% of their AGI in charitable contributions.

For example, a donor with $500,000 AGI will not be able to deduct the first $2,500 of charitable contributions.

Who may be affected: Primarily high-income households, small-business owners, or those who regularly itemize.

3. Permanently Extended Charitable Provisions

Two previously temporary charitable incentives are now permanent:

  • Qualified Charitable Distributions (QCDs)
    • Donors aged 70½ or older can continue making gifts directly from an IRA to a qualified nonprofit.

These gifts can:

  • Count toward required minimum distributions
  • Reduce taxable income
  • Provide an option to fund a one-time split-interest gift (up to $54,000)

Higher Estate & Gift Tax Exemptions Beginning in 2026:

  • $15 million exemption for individuals
  • $30 million exemption for married couples

Many donors will continue choosing legacy gifts because they align with personal values, not just tax incentives.

Cap on Itemized Deduction Value

Regardless of a donor’s tax bracket, itemized deductions will be limited to 35 cents per dollar. This may influence timing and strategy for households that typically make larger charitable gifts.

What These Changes Could Mean for You

If You Take the Standard Deduction

Beginning in 2026, you may be eligible for a universal charitable deduction even if you do not itemize your taxes. This could make your giving more tax-advantaged than before.

Here are a few things to consider:

  • You may decide to time some gifts in 2026 to take advantage of the new deduction.
  • If you are age 65 or older, the expanded senior deduction taking effect in 2025 may increase your overall charitable capacity.
  • Even smaller or recurring gifts may now provide a modest tax benefit, depending on your personal tax situation.

 If You Are an Itemizer or a High-Income Household

For donors who itemize deductions, or whose income places them in higher tax brackets, two major changes may affect how you plan your giving:

  • You may choose to “bunch” or consolidate several years of gifts into one year, potentially using a donor-advised fund, to maximize deductibility.
  • It may be advantageous to accelerate some giving into 2025 before the new deduction floor and cap take effect.
  • Giving appreciated non-cash assets such as stock, real estate, or business interests may continue to offer significant tax advantages.
  • If you have an existing multi-year pledge, you may wish to complete payments earlier to benefit from current rules.

Your tax advisor can help you determine which of these strategies may apply to your situation.

If You Are Age 70½ or Older

Qualified Charitable Distributions (QCDs) from IRAs continue to be one of the most tax-efficient ways to give. A QCD may:

  • Reduce your taxable income
  • Satisfy the required minimum distributions
  • Be used (up to $54,000 in a one-time option) to establish certain types of charitable gift annuities

This provision may be especially beneficial if you prefer to give directly from retirement assets.

 If You Are Thinking About Your Legacy

Beginning in 2026, the federal estate and gift tax exemption will rise to:

  • $15 million for individuals
  • $30 million for married couples

While this may affect how families plan gifts to heirs, many donors continue to include charitable bequests because legacy planning reflects personal values, not just tax policy.

If you’re revisiting your estate plans, this may be a good moment to explore how charitable giving fits into your long-term goals.

No Matter How You Give

These tax law changes may influence the timing or structure of charitable gifts, but generosity remains deeply personal. Most donors continue giving because they believe in the impact their philanthropy makes, and that doesn’t change.

As you think about your plans for 2025 and 2026, your tax and financial advisors are the best resources to help you understand how the new rules apply to your individual situation. We encourage you to consult with your:

  • Tax professional
  • Financial planner
  • Estate planning attorney

They can help you determine the most beneficial timing and approach for your charitable giving.

We’re Here if You’d Like to Talk

If you’d like to explore how your giving can support world-class care for our community, we would be grateful to connect.

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