Beginning in 2026 charitable contributions for itemizers will be subject to a new floor. This means that the first .5 percent of charitable contributions will not be deductible if a taxpayer chooses to itemize deductions.
Example: In 2026, Sarah has an Adjusted Gross Income (AGI) of $200,000 and makes $10,000 in charitable contributions. Under the new rule, the first 0.5% of AGI ($1,000) is not deductible. AGI: $200,000, 0.5% floor: $200,000 × 0.005 = $1,000, Total contributions: $10,000, Deductible amount: $10,000 – $1,000 = $9,000. So, even though Sarah donated $10,000, only $9,000 will be deductible if she itemizes her deductions.