2026 Tax Law Changes

Taxpayers who take the standard deduction can now deduct cash donations to qualifying public charities directly from their income - no itemizing required.

Filing Status	Maximum Deduction
Single filers	$1,000
Married filing jointly	$2,000

Only cash gifts to eligible public charities like PFF qualify. Contributions to donor-advised funds, private foundations, or non-cash gifts (such as appreciated stock) are not eligible for this deduction.

The standard deduction has increased again for the tax year 2026, to $16,100 for single filers and $32,200 for joint filers, with future amounts indexed for inflation.

Beginning in 2026, itemizers may only deduct charitable contributions to the extent that their total qualified contributions exceed 0.5% of their Adjusted Gross Income (AGI). The first 0.5% of AGI in donations is no longer deductible.

AGI Example	Floor Amount	Effect on First Gift
$100,000	$500	First $500 donated yields no deduction
$200,000	$1,000	First $1,000 donated yields no deduction
$500,000	$2,500	First $2,500 donated yields no deduction

High-income individuals who itemize deductions should carefully consider the timing and amounts of their giving, and the strategies to maximize their deduction. Corporations may want to take steps to proactively manage their giving to ensure they exceed the 1% threshold. Additionally, individuals and organizations may benefit from consulting a tax advisor to understand how the new rules apply.

Itemizing donors may continue to deduct cash contributions to public charities (like the PFF) up to 60% of their Adjusted Gross Income in any single tax year. If your total charitable gifts exceed the AGI ceiling in any year, the excess can be carried forward and deducted in up to five subsequent tax years, subject to the same percentage limits.

Taxpayers in the highest federal income tax bracket (37%) now face a cap on the effective tax benefit of all itemized deductions - including charitable contributions - at 35 cents on the dollar rather than 37 cents.

Gift Amount	2026 Tax Servings (35% cap)
$1,000	$350
$10,000	$3,500
$50,000	$17,500

High-income donors who plan to make significant contributions to PFF may want to consult a tax advisor about whether accelerating gifts, using donor-advised funds, or making QCD distributions could offset this reduction in deduction value.

If you are age 70½ or older and hold a traditional, inherited, or rollover IRA, you can direct funds directly to PFF as a Qualified Charitable Distribution (QCD) - a direct trustee-to-charity transfer that is excluded from your taxable income. QCDs have become significantly more attractive in 2026 because they bypass all of the new restrictions on itemized deductions.

	2026 Limit
Per individual	$111,000
Married couple (both eligible)	$222,000

QCDs are excluded from your Adjusted Gross Income entirely - they are not subject to the new 0.5% AGI floor or the 35% cap that limits itemized deductions for high earners. They also satisfy Required Minimum Distribution (RMD) obligations without triggering taxable income and can help reduce Medicare IRMAA surcharges.

For retirees who take the standard deduction, a QCD may be the only practical way to receive a meaningful tax benefit for charitable giving. Eligible accounts include traditional IRAs, inherited IRAs, and rollover IRAs. Employer-sponsored plans like 401(k)s do not qualify unless first rolled into an IRA.