The IRS has updated rules for charitable contribution deductions for the 2025-2026 tax year, introducing new limits and eligibility requirements. Taxpayers should note revised cap thresholds and documentation standards to maximize tax benefits.
- Cash donation deduction cap increased to $12,000 for non-itemizers in 2025-2026
- Electronic or written acknowledgment required for donations over $250
- Form 8283 must accompany donations exceeding $500
- AGI limits for cash donations remain at 60% of AGI, with reduced caps for non-cash assets
- Carryover period for unused deductions extended to five years for conservation easements
- Non-cash contributions subject to capital gains tax if appreciated beyond cost basis
The Internal Revenue Service has released updated guidance for the 2025-2026 tax year regarding deductions for charitable contributions, affecting individual filers who itemize. A significant change includes a new annual cap of $12,000 for cash donations to public charities, up from $10,000 in the prior cycle. This adjustment applies to taxpayers filing under the standard deduction who use the new $12,000 special deduction for qualified cash contributions, provided they do not itemize. The expanded option allows eligible taxpayers to claim a deduction even without itemizing, though they must forgo other itemized deductions. A new requirement mandates electronic or written records for all donations exceeding $250, including donor acknowledgment from the charity. For donations above $500, the IRS requires Form 8283 to be filed with the tax return. Contributions of non-cash items, such as appreciated securities or real property, are subject to additional valuation rules and may trigger capital gains implications if the asset has appreciated beyond its original cost basis. The adjusted gross income (AGI) limitation for cash donations remains at 60% of AGI for most public charities, but drops to 30% for contributions of appreciated non-cash assets. Donors of conservation easements may face a 20% AGI cap, with unused amounts carried forward for up to five years. These thresholds are fixed through the 2026 filing season, with no indication of extension beyond that period. Tax preparers and filers must ensure compliance with the new documentation and reporting standards to avoid disallowance of deductions. Charities registered under IRC Section 501(c)(3) are eligible, but donors should verify a charity’s status via the IRS Tax Exempt Organization Search tool. The changes are expected to influence giving patterns, particularly among middle-income households, as the $12,000 cap aligns with broader tax simplification efforts.