Charitable Deduction AGI Limits: How Much Can You Deduct in 2026?

The IRS doesn't cap charitable deductions at a flat dollar amount — it caps them as a percentage of your adjusted gross income (AGI). How much you can deduct depends on two things: what you give (cash vs. appreciated property vs. complex assets) and who you give it to (public charity vs. private foundation vs. conservation organization). On top of those base limits, the 2026 tax year introduced two new OBBBA restrictions that reduce the benefit further for high-income donors.

This guide covers every tier of the system, how the OBBBA changes layer in, and worked examples for the scenarios HNW donors encounter most.

Base AGI limits by gift type and recipient

¹ Note on the 60% vs. 30% cash distinction: Nearly all common charities — churches, hospitals, universities, food banks, arts organizations, and donor-advised fund sponsors — qualify as 50% limit organizations, making them eligible for the 60% cash limit. Private foundations (family foundations, grant-making foundations) and a narrower set of organizations use the 30% cash limit.

The OBBBA overlay: two new 2026 restrictions

Starting January 1, 2026, the One Big Beautiful Bill Act added two restrictions that reduce the value of charitable deductions beyond the base percentage limits. ² These are not the same rule described twice — they are two distinct mechanisms that may both apply to the same donor.

Rule 1: 0.5% AGI floor — applies to ALL itemizing taxpayers

Charitable contributions are deductible only to the extent they exceed 0.5% of your AGI. The first 0.5% of AGI worth of charitable giving each year is simply non-deductible — it does not reduce your taxes and it does not carry forward. ²

For most HNW donors, the 0.5% floor is a modest reduction. A donor with $2M AGI giving $500K loses $10,000 of deductible benefit — meaningful but not dramatic. The floor matters most for donors who give relatively small amounts relative to income, where the floor consumes a larger fraction of their total gift.

Rule 2: 35% value cap — applies only to 37% bracket taxpayers

For taxpayers in the 37% federal income tax bracket (income above $640,600 single / $768,700 MFJ in 2026), the value of every dollar of itemized deduction is capped at approximately 35 cents — not 37 cents. The mechanism: OBBBA reduces total itemized deductions by 2/37 of the lesser of (a) your total itemized deductions or (b) your income above the 37% bracket threshold. For very high earners with substantial income in the 37% bracket, this consistently reduces every dollar of deduction to about 35 cents of tax savings. ³

The 35% cap does NOT reduce the deductible amount — your $500K deduction is still a $500K deduction. It only reduces what that deduction is worth in tax savings to 37% bracket taxpayers. For donors below the 37% bracket, this rule does not apply at all.

The standard deduction context: deductions only matter if you itemize

The AGI percentage limits and OBBBA restrictions are irrelevant if you don't itemize. The 2026 standard deductions are: ⁴

• Single: $16,100 (+ $2,050 if age 65+)
• Married filing jointly: $32,200 (+ $1,650 per qualifying spouse age 65+)

If your total itemized deductions — mortgage interest, state and local taxes (SALT, $10,000 federal cap), charitable contributions, and any remaining miscellaneous deductions — don't exceed the standard deduction, you claim the standard deduction and your charitable giving creates no additional tax benefit that year.

This is the fundamental tension for most donors who give $20K–$100K per year: they would itemize in a bunching year but not in regular years. The solution is concentrating multiple years of giving into a donor-advised fund in a single high-deduction year, claiming the large itemized deduction once, then distributing grants annually from the DAF while taking the standard deduction in non-bunching years.

The 5-year carryover for excess gifts

If your gifts in any year exceed the applicable AGI limit, the excess carries forward for up to five years under IRC § 170(d)(1). ⁵ The carryover uses the same percentage limit that applied to the original gift, and it expires unused if not absorbed within five years.

How carryover stacking works

In years with a carryover, current-year gifts are deducted before carryover amounts. This FIFO ordering matters: if a carryover is about to expire in year 5, but a large new gift in that year fills the AGI limit, the expiring carryover may be wasted. Strategic timing of large gifts can mitigate this.

The 0.5% floor applies to carryforward years as well — the carryover is deductible only to the extent it (plus any new current-year gifts) exceeds 0.5% of that year's AGI.

Worked examples

Example 1: MFJ couple, $380K AGI, $40K annual cash giving

This couple gives $40,000 to their church and community foundation each year. Their other deductions: $8,000 in mortgage interest and $10,000 SALT (at the cap).

• 60% limit: $228,000 — the $40K gift is well under the limit.
• 0.5% floor: $1,900 non-deductible. Deductible amount: $38,100.
• Total itemized deductions: $38,100 + $8,000 + $10,000 = $56,100.
• Standard deduction: $32,200. They itemize — the charitable deduction generates real tax savings.
• Bracket: 32%. 35% cap does not apply.
• Tax savings on charitable gift: $38,100 × 32% = ~$12,192.

Example 2: Single filer, $800K income, $200K appreciated stock gift to DAF

This donor is in the 37% bracket and gives $200,000 in Apple stock with a $15,000 cost basis to a donor-advised fund. Capital gains avoided: $185,000 in LTCG at 23.8% (20% LTCG + 3.8% NIIT) = $44,030.

• 30% AGI limit: $240,000 — $200K gift is fully deductible before the floor.
• 0.5% floor: $4,000. Deductible amount: $196,000.
• In 37% bracket — 35% cap applies. Deduction worth 35 cents per dollar.
• Income tax savings: $196,000 × 35% = $68,600.
• Total benefit (income tax + capital gains avoided): $68,600 + $44,030 = $112,630.
• If instead they sold the stock and donated cash: $185,000 × 23.8% = $44,030 in capital gains tax first, then donation; net deductible value lower.

The appreciated stock route outperforms cash donation by approximately $44,000 at these inputs — almost entirely due to the capital gains tax avoided.

Example 3: MFJ, $2M AGI, $800K business stock gift to DAF — triggers carryover

A business owner contributes $800,000 in closely-held company stock (qualified appraisal required) to a donor-advised fund in the year of their company's sale.

• 30% AGI limit: $600,000. Gift exceeds limit by $200,000.
• 0.5% floor on $2M AGI: $10,000. Deductible in year 1: $600,000 − $10,000 = $590,000.
• $200,000 carries forward to years 2–5 (subject to the 30% limit each year).
• If subsequent years have $2M AGI: 30% limit = $600K; annual 0.5% floor = $10K. The $200K carryover is fully absorbed in year 2.
• In 37% bracket — income tax savings on $590K: $590,000 × 35% = $206,500 in year 1.
• Capital gains avoided on $800K stock (assuming $50K basis): $750K × 23.8% = $178,500.

How gift vehicles interact with the limits

Planning implications for 2026

Bunching into a DAF remains the primary strategy for standard-deduction-range donors

The 0.5% floor is a minor drag but doesn't change the core logic: a donor with $250K AGI giving $25K/year gets modest tax benefit because $25K barely clears the standard deduction threshold. Bunching 3 years into a DAF ($75K) creates $75,000 − $1,250 (floor) = $73,750 deductible in year 1, well above the $32,200 standard deduction. The next two years they claim the standard deduction.

Appreciated stock beats cash at every tier

At the 30% AGI limit, giving appreciated stock (not cash) to a public charity or DAF eliminates capital gains that would otherwise be taxable. The 30% limit is lower than the 60% cash limit, but the combined income tax deduction plus capital gains avoided almost always makes stock gifts more efficient than selling and donating cash.

Private foundation deduction efficiency has declined slightly under OBBBA

Appreciated property to a private foundation is limited to 20% AGI and faces the same 0.5% floor and 35% cap as other gifts. If maximizing the current-year income tax deduction is the primary goal, a DAF is almost always more efficient. A private foundation is justified by family control, grantmaking flexibility, and governance objectives — not by deduction efficiency.

The 35% cap affects large gifts less than it appears

For a donor in the 37% bracket, the difference between a 37% and 35% effective deduction rate on a $500K gift is $10,000 — real, but not a reason to restructure a giving plan. The capital gains savings from giving appreciated property (often 10–25× larger than the cap haircut) dominate the economics.