Big news: starting in 2026, the rules for charitable giving in the U.S. are changing in a big way.
The One Big Beautiful Bill Act (OBBBA), signed in 2025, creates new, permanent tax incentives for charitable giving. Some of these rules make it easier for everyday donors to get a tax break for the first time. Others change how higher-income donors and corporations think about their giving.
If you lead workplace giving, CSR, HR, or People & Culture, these changes matter a lot. They will shape:
- How your employees choose to give
- How your company structures matching donations and campaigns
- How you talk about impact and ROI with leadership
This guide explains the 2026 rules in simple language and shows how to turn them into a win for your people, your company, and your social impact — with help from tools like the Percent Pledge Giving Platform.
Quick note: This article is for general information only and is not tax advice. Employees and companies should talk with their own tax advisors about their specific situation.
What Changes in 2026? The Big Picture
Starting with the 2026 tax year:
- More people who don’t itemize can finally get a tax break for giving.
- People who do itemize face a new “floor” before their charitable gifts become deductible.
- High-income donors see a small haircut on the value of their deductions.
- The higher 60% AGI limit for cash gifts becomes permanent.
- Retirees can move even more money from IRAs to charities using QCDs.
- C-corporations face a new 1% income floor before they can deduct charitable donations.
In other words, the tax code is nudging more everyday people to give, and asking wealthier individuals and companies to be a bit more intentional.
That’s a big opportunity for workplace giving programs.
Part 1: What Changes for Your Employees in 2026?
1. A New Above-the-Line Deduction for Non-Itemizers
For years, if your employees took the standard deduction, they basically got no tax benefit from charitable giving.
Starting in 2026, that changes.
- Non-itemizers can now deduct up to $1,000 of charitable cash gifts each year
- Married couples filing jointly can deduct up to $2,000
- This deduction is “above the line,” which means it reduces adjusted gross income (AGI) even if they don’t itemize
- It only applies to direct gifts to operating charities, not donor-advised funds (DAFs) or private foundations
In plain language:
“Even if I don’t itemize, I can still get a tax break for up to $1,000 (or $2,000 as a couple) of my giving each year.”
Example:
An employee who takes the standard deduction and donates $1,000 in 2026 can deduct that $1,000 above the line. If they are in the 22% bracket, that’s about $220 in tax savings — a benefit they did not get before.
For workplace giving leaders, this is huge:
- Roughly 90% of households use the standard deduction
- That means a giant new pool of employees now have a clear, simple tax reason to give every year
How you can help:
- Use the Passion Assessment to help employees discover causes they care about so they’re motivated to actually use this new deduction.
- Run campaigns encouraging employees to “max out” their new $1,000 or $2,000 charitable deduction in a year.
- Make it easy for them to give and track totals through your workplace giving platform, so they have clean records for tax time.
- Highlight that your company’s matching gifts program can double or triple the impact of those employee donations.
And remember: this deduction only applies to qualified charities — not DAFs or private foundations — which makes strong charity vetting and Cause Portfolios even more important.
2. A New 0.5% AGI “Floor” for Itemizers
For employees who do itemize, 2026 brings a new rule:
Only the portion of their charitable giving that is above 0.5% of their AGI is deductible.
The first 0.5% of income given to charity gets no deduction.
Example:
- An employee has AGI of $200,000
- 0.5% of $200,000 = $1,000
- If they give $2,000 to charity, only the second $1,000 is deductible
If a couple has AGI of $300,000, the first $1,500 of their giving is effectively ignored for deduction purposes.
For many itemizers, especially higher earners who give casually, this means:
- Small, spread-out gifts might not generate any deduction
- To get a tax benefit, their total annual giving needs to clear that 0.5% floor
This may lead some donors to “bunch” their giving: instead of sharing smaller gifts every year, they give bigger amounts in certain years to get over the floor, and then scale back in other years.
What this means for your workplace giving program:
- You can position some years as “big giving years” with larger campaigns, especially for senior leaders and higher earners.
- You can run special campaigns — like disaster relief, heritage months, or annual giving challenges — that help donors push past the floor in those key years.
For example, your disaster relief donations program can be part of a bunched giving strategy when global crises hit, while still being managed through your workplace giving infrastructure.
3. A Small “Haircut” for Top-Bracket Donors
Starting in 2026, donors in the 37% tax bracket still get to deduct their gifts, but the value of those deductions is capped as if they were in the 35% bracket.
- Before: A $10,000 donation could save about $3,700 in federal tax
- After: That same gift saves at most $3,500
The donation itself is still fully deductible (subject to AGI limits); it just saves a bit less tax for top earners.
For your executives or very high earners:
- The change is real but relatively small on typical annual gifts
- It might influence timing of very large, one-time gifts
- It does not remove the strong tax incentive to give — especially when combined with company matching
This is another place where a well-designed matching gifts program can make a big difference. Even if the tax savings are slightly smaller, the impact for nonprofits is much bigger when the company matches.
4. 60% AGI Limit for Cash Gifts Becomes Permanent
There’s also good news: the higher 60% of AGI limit for cash gifts to public charities, introduced in 2017, is now permanent.
- Itemizers can keep deducting cash gifts up to 60% of AGI each year
- Excess above that can still carry forward for up to five years
Most employees will never hit this limit, but:
- It matters for executives or very generous donors
- It matters for large, one-time campaign gifts or big disaster relief responses
Again, this is a reminder that your workplace giving program should be able to handle and track larger gifts, not just $25–$100 donations.
The Percent Pledge Giving Platform helps you do exactly that — from small recurring gifts to major one-time donations.
5. QCDs from IRAs Get Even More Room
If you have employees or retirees age 70½+, Qualified Charitable Distributions (QCDs) from IRAs remain one of the most tax-efficient ways to give:
- QCDs let them send money directly from an IRA to a charity
- That amount is not counted as taxable income
- QCDs are not affected by the new 0.5% floor or 35% cap because they’re not itemized deductions
The annual QCD limit is now indexed for inflation. By 2026:
- It rises to roughly $115,000 per person (about $230,000 for a couple with two IRAs)
So retirees can move even more pre-tax dollars to charity, tax-free.
Your role as an employer is not to give personal tax advice, but you can:
- Educate older employees about the existence of QCDs
- Ensure your charity vetting and Cause Portfolios include strong operating charities that can receive these gifts
Part 2: What Changes for Your Company in 2026?
1. New 1% Income Floor for C-Corporations
For C-corporations, charitable deductions get a new rule:
Only corporate giving above 1% of taxable income is deductible, up to the normal 10% cap.
So:
- The first 1% of profits donated each year is not deductible
- The usual 10% of taxable income cap still applies
- Excess above the 10% cap can still be carried forward for five years
Example:
- A C-corp makes $2,000,000 in taxable income
- 1% of that is $20,000
- If the company donates $10,000 (0.5%), none of it is deductible
- If they donate $25,000, only $5,000 (the portion above 1%) is deductible
This will push some companies to make a choice:
- Give more, to at least hit 1% so some portion is deductible, or
- Give less, and accept that small, scattered gifts won’t get any tax benefit
For CSR and workplace giving leaders, this is both a challenge and an opportunity:
- You now have a strong argument for a clear, annual giving budget tied to at least 1% of profits.
- Instead of many small, ad-hoc corporate donations, you can push for planned giving through your workplace program — including structured match programs and crisis campaigns.
And because every dollar counts more when tax rules are tighter, you need clean data:
- How much did the company give?
- How much did employees give?
- How much did the company match?
- What percent of income did that represent?
The Percent Pledge Giving Platform helps track all of this in one place so your finance team can plan around the 1% floor and 10% cap.
Pass-through entities (S-corps, partnerships, LLCs) don’t face this 1% corporate floor. Their giving flows to owners’ personal returns, where the new 0.5% AGI floor and other individual rules apply.
Part 3: What This Means for Workplace Giving Programs
When you zoom out, the 2026 rules send a clear message:
- Everyday employees finally get a simple tax incentive to give, even if they don’t itemize.
- Itemizers and corporations need to be more intentional about when and how much they give.
As a workplace giving leader, you can turn this into a big win.
For Employees
You can:
- Encourage non-itemizers to “max out” their new $1,000 / $2,000 above-the-line deduction each year.
- Use the Passion Assessment so giving feels personal, not forced.
- Make giving easy and trackable through your Giving Platform so employees know how much they’ve given by year-end.
- Use company matching gifts to double impact, even if the employee’s personal deduction is capped.
- Recognize employees with Impact Badges for being consistent givers, supporting diverse causes, or hitting personal giving milestones.
For the Company
You can:
- Work with finance to plan around the 1% corporate floor, using your program data.
- Consolidate corporate giving (including disaster relief campaigns and match budgets) into one strategy that meets both social impact and tax goals.
- Use your giving data in ESG/CSR reporting to show how your company responds to this new era of philanthropic responsibility.
And because the new above-the-line deduction excludes DAFs and private foundations, you can emphasize direct support to operating charities through your vetted Cause Portfolios — all inside your workplace giving experience.
How Percent Pledge Helps You Capitalize on the 2026 Rules
The new tax rules are complex. Your employees and executives don’t want to read tax code — they want a simple way to do the right thing, and maybe save a little on taxes along the way.
Percent Pledge makes that possible by:
- Powering a modern giving platform where employees can give in under a minute, from any device.
- Automating matching gifts so there are no forms, no spreadsheets, and no delays.
- Offering deep charity vetting and Cause Portfolios so employees can support operating charities that qualify for new deductions, with zero reputational risk.
- Using the Passion Assessment to match employees with causes they truly care about, so they actually use their new tax incentives.
- Recognizing givers with engaging Impact Badges that celebrate their role as impact makers, not just checkwriters.
- Supporting campaigns, including disaster relief donations, so you can “bunch” giving in impactful moments when it makes sense for donors and the business.
- Delivering clean, exportable data so your finance team understands both employee giving and corporate giving against the new floors and limits.
The Bottom Line: New Rules, Bigger Opportunity
The 2026 charitable giving tax rules are not just a headache for accountants. They’re a chance to:
- Bring more employees into your workplace giving program
- Help donors feel like true impact makers
- Align your corporate giving budget with both purpose and tax reality
The tax code is finally recognizing what you already know:
Giving isn’t just something people do on the side. It’s a powerful, everyday choice — and your workplace can make it easier, smarter, and more rewarding.
If you’re ready to turn these new rules into a win for your people and your program, Percent Pledge is here to help you build a donor-centric, data-backed workplace giving program that’s ready for 2026 and beyond.