How the New Tax Law Changes Charitable Giving in 2026: What Windham, NH Families Should Know
A New Law Just Changed How Charitable Giving Gets Taxed
Do you give to charity every year? If so, the rules just changed. The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, rewrites several federal charitable giving tax rules starting with the 2026 tax year. Some donors will owe more. Others will get a new deduction they never had before.
Here’s the short answer: if you itemize deductions, a new 0.5% AGI floor and a 35% deduction cap for top earners will reduce the tax benefit of your gifts. If you take the standard deduction, you can now deduct up to $1,000 (or $2,000 if married) even without itemizing. The rest of this article breaks down exactly what changed and what to do about it.
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What Changed for Itemizers in 2026
Starting in 2026, itemizers face a new 0.5% AGI floor on charitable deductions. In other words, the first 0.5% of your adjusted gross income in giving no longer counts. Only the amount above that floor is deductible.
For example, imagine a couple with $400,000 in AGI. Their floor equals $2,000. Therefore, if they donate $5,000 this year, only $3,000 is deductible. The remaining $2,000 provides no tax benefit at all.
In addition, top-bracket donors face a second change. Taxpayers in the 37% bracket now see their itemized deductions capped at a 35% benefit rate. As a result, every dollar donated saves two cents less than it used to. That gap sounds small, but it adds up quickly on larger gifts.
What Changed for Non-Itemizers in 2026
Not every change works against donors. For the first time, taxpayers who take the standard deduction can also deduct charitable gifts. Specifically, single filers can deduct up to $1,000 in cash gifts, while married couples filing jointly can deduct up to $2,000.
This deduction only applies to cash gifts made directly to qualifying public charities. Gifts to donor-advised funds or private foundations don’t qualify. Still, for many everyday donors, this is a meaningful new benefit that didn’t exist before.
Why New Hampshire Donors Should Pay Close Attention
New Hampshire has no state income tax and no state capital gains tax on most investments. Because of this, federal rules like the OBBBA carry even more weight here than they do in high-tax states, since your federal return does most of the heavy lifting for your overall tax picture.
Windham, in particular, is home to many high-income households, business owners, and multi-generational families who give generously each year. If that describes you, these changes deserve a closer look before your next gift, not after.
Strategies Worth Considering Before You Give
Bunch your donations. Instead of giving the same amount every year, consider combining two or three years of giving into a single year. This approach helps you clear the 0.5% floor more easily and maximizes your deduction in that year.
Consider a donor-advised fund. A donor-advised fund lets you make one larger contribution now, take the deduction immediately, and then distribute grants to charities over several years. Consequently, you get the bunching benefit without deciding on every recipient right away.
Donate appreciated assets instead of cash. If you own stock or other investments that have grown in value, donating them directly can help you avoid capital gains tax while still supporting your favorite causes.
Use a Qualified Charitable Distribution (QCD) if you’re 70½ or older. A QCD lets you direct funds from your IRA straight to a charity. Although it isn’t a deduction, it reduces your taxable income and doesn’t count against the new AGI floor.
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How This Fits Into Your Broader Financial Plan
Charitable giving rarely stands alone. It typically connects to your tax strategy, your investment portfolio, and your estate plan all at once. That’s why Granite Oak Private Wealth coordinates these pieces together, rather than treating each one separately.
Robert J. Walczak, a CFP® professional based between our Londonderry, NH and Franklin, TN offices, works closely with Windham-area families to build giving strategies that fit their full financial picture. To learn more about how we serve clients in this community, visit our financial advisor in Windham, NH page.
