A major change to the U.S. tax code takes effect on January 1, 2026, and it will reshape how employees think about charitable giving. It also creates a unique opportunity for companies to modernize and strengthen their matching gift programs.
This new opportunity is simple:
Employees who take the standard deduction (about 90 percent of the country) will now get a new above-the-line tax deduction for charitable giving.
They can now deduct:
• $1,000 per year as an individual
• $2,000 per year if married filing jointly
This is the first time in decades that non-itemizers receive any tax benefit for charitable giving. And because this deduction is above-the-line, it reduces taxable income even before the standard deduction is applied.
For employees, this creates a new financial incentive to give.
For employers, it creates a new opportunity to increase participation, engagement, and impact through matching gifts.
Below is a practical guide to updating your matching gift program for 2026.
The 2026 Tax Change That Will Reshape Employee Giving
Beginning January 1, 2026, most employees will be able to deduct their first $1,000 in charitable giving. Married couples can deduct their first $2,000.
This deduction is above-the-line, meaning it reduces taxable income directly. And because most employees take the standard deduction, this is a brand-new benefit for them.
To ensure employee donations qualify, companies should prioritize giving platforms with strong nonprofit verification. For example, Percent Pledge’s charity vetting ensures every nonprofit an employee supports is eligible for IRS-compliant tax receipts, delivered instantly through our Giving Platform.
This combination—new tax rules for employees and automated compliance for employers—makes 2026 a turning point for workplace giving.
Why This Matters for Employers: A New “Smart Giving Threshold”
The new tax deduction creates what we call a smart giving threshold of $1,000 per year for individuals.
Before 2026, only itemizers could deduct charitable giving. Now, everyone receives a financial benefit for donating up to that amount. This means:
• Employees are more motivated to donate
• Their net cost of giving goes down
• Matching gift programs become even more valuable
A simple example
An employee in the 22% tax bracket donates $1,000 in 2026. They save $220 on their taxes. Their after-tax cost is only $780.
If their employer matches that $1,000, the employee’s $780 in real cost now creates $2,000 in impact.
This is why aligning matching programs to the new deduction threshold matters. Your employees now have a built-in reason to give—and matching helps them go further.
To support this shift, companies should evaluate their existing matching approaches and ensure they’re built on a modern, automated foundation such as Percent Pledge’s Matching Gifts and Giving Platform.
The New 2026 Matching Strategy: Set Your Match Floor at $1,000
To align with the new tax structure, the most effective step companies can take is to set their matching gift floor at $1,000 per employee per year.
This approach:
• Aligns directly with the new tax incentive
• Gives employees a clear target to maximize their tax benefit
• Simplifies communication (“The company matches up to $1,000 annually”)
• Predicts budget spend more easily
• Strengthens your culture of giving
A $1,000 match floor does not prevent you from offering higher matches or tiered options. It simply establishes a minimum strategic level that reflects the new IRS policy.
To execute this effectively, companies need reliable automation and tracking. Features within the Giving Platform and Matching Gifts ensure employees receive instant match approvals, IRS-compliant receipts, and real-time visibility into their giving.
Complementary tools like the Passion Assessment can further strengthen engagement by helping companies understand what causes matter most to employees.
How to Roll Out a 2026-Aligned Matching Program
Updating your matching strategy is only half the work. Communicating the change and reducing friction are equally important.
Step 1: Communicate the new tax benefit clearly
Employees should understand that, for the first time, they receive a tax benefit even if they take the standard deduction. HR teams should use clear, simple examples. The Passion Assessment can support these communications by helping leaders understand the causes employees prefer to support.
Step 2: Set your match at $1,000 (or more)
This amount aligns with the IRS benefit and gives employees a direct reason to participate.
Step 3: Automate matching to remove friction
Manual forms significantly reduce participation. Automated matching dramatically increases it.
Step 4: Use campaigns to drive participation
Company-wide giving campaigns—such as Breast Cancer Awareness Month or Giving Tuesday—are ideal ways to help employees hit the $1,000 threshold.
Step 5: Track participation and impact
Real-time dashboards and reporting help HR, CSR, and Finance leaders understand engagement and impact.
How Percent Pledge Helps Companies Optimize Their Matching Gift Programs
Percent Pledge provides everything companies need to modernize matching gifts in 2026:
• Instant IRS-compliant receipts for employees
• Automated matching that eliminates manual forms
• Verified nonprofits for compliance
• Live dashboards and reporting for HR, CSR, and Finance
• Easy-to-launch campaigns to drive engagement
• Recognition tools like Impact Badges
Together, these features create a seamless giving experience for employees and a scalable, trackable program for employers.
Example 2026-Ready Matching Program (Template)
Many companies upgrading their programs for 2026 use this simple structure:
• Annual match cap: $1,000 per employee
• Dollar-for-dollar match
• Employees can support any verified 501(c)(3)
• Matching processed automatically through the Giving Platform
• Engagement driven by campaigns and recognition programs
Interested in modernizing your matching gift program for 2026?
Many HR, CSR, and Finance teams are updating their programs right now.
We’d be glad to help you design a matching gift strategy that aligns with the new tax incentives, increases participation, and strengthens your culture of giving.
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