Rooted in Generosity

Navigating the 2026 Charitable Tax Changes

2026 Tax Changes: What It Means for Your Giving

Tax rules are changing in 2026—but your ability to plant shade, restore canopy, and strengthen our Lower Cape Fear communities remains as powerful as ever. While tax policies may shift, one thing doesn’t: trees are still one of the smartest investments you can make in community health, climate resilience, and neighborhood equity.

Below is a simplified guide to the major updates and what they mean for supporting organizations like the Alliance for Cape Fear Trees.

A Charitable Deduction Returns for Non-Itemizers

WHAT'S CHANGING

Taxpayers who take the standard deduction can claim a charitable deduction again.

Up to $1,000 for individuals
Up to $2,000 for married couples filing jointly
Applies only to cash gifts made directly to qualified public charities
Does not apply to gifts made to donor-advised funds (DAFs) or private foundations

WHY THIS MATTERS
Nearly 90% of taxpayers take the standard deduction. This change recognizes that generosity at every level — whether funding one tree or an entire planting project — deserves acknowledgment.

HOW TO MAXIMIZE IT

Give directly to qualified public charities like ACFT.

Keep receipts for cash contributions.
Ensure gifts are completed within the calendar tax year.

A New Tax Break for Everyday Donors

WHAT'S CHANGING

Taxpayers who take the standard deduction can claim a charitable deduction again.
Up to $1,000 for individuals
Up to $2,000 for married couples filing jointly
Applies only to cash gifts made directly to qualified public charities
Does not apply to gifts made to donor-advised funds (DAFs) or private foundations

WHY THIS MATTERS

Nearly 90% of taxpayers take the standard deduction.

This change recognizes that generosity at every level — whether funding one tree or an entire planting project — deserves acknowledgment.

HOW TO MAXIMIZE IT

Give directly to qualified public charities like ACFT.
Keep receipts for cash contributions.
Ensure gifts are completed within the calendar tax year.

A New 0.5% AGI Floor for Itemizers

WHAT'S CHANGING

If you itemize, charitable deductions now apply only to the portion of your giving that exceeds 0.5% of your Adjusted Gross Income (AGI).

EXAMPLE

AGI: $200,000
First $1,000 (0.5%) of charitable gifts is not deductible
Only the amount above $1,000 qualifies

WHY THIS MATTERS

Some donors may need to give slightly more to receive the same tax benefit as before.

SMART STRATEGIES

Consider “bunching” multiple years of giving into one tax year.

Combine gifts through a donor-advised fund — or give directly to nonprofits you support.
Donate appreciated assets to help exceed the AGI floor.

Qualified Charitable Distributions (QCDs) — Expanded

FOR INDIVIDUALS AGE 70½ OR OLDER:

Annual tax-free QCD limit increases to $111,000 per person
QCDs count toward Required Minimum Distributions (RMDs)
QCDs are excluded from taxable income

WHY THIS MATTERS:

QCDs:

Bypass the 0.5% AGI floor
Avoid the deduction cap
Reduce taxable income
Satisfy RMD requirements

For many retired donors, this is one of the most tax-efficient ways to give.

HOW TO USE IT:

Direct IRA transfers straight to a qualified public charity.
Complete transfers before December 31.
Coordinate with your IRA administrator.

Corporate Giving Updates

WHAT'S CHANGING

Corporations may deduct charitable contributions only above 1% of taxable income
Unused deductions can be carried forward for up to five years

PLANNING STRATEGIES

Structure gifts to exceed the 1% floor.
Consider multi-year pledges.
Plan giving across multiple tax years if needed.

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While tax rules are shifting, charitable giving remains one of the most effective ways to create meaningful, measurable impact.

If you'd like to explore how your giving can grow further in 2026, we’re always glad to have a conversation—and we encourage you to consult your financial advisor, accountant, or tax professional to determine what’s best for your situation. The Alliance for Cape Fear Trees is not a tax advisor, and the information provided on this page is for general informational purposes only.