Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
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Updated July 28, 2026. Quick answer: Beginning in tax year 2026, IRC §170(b)(1)(I) disallows the first 0.5% of your contribution base of itemized charitable giving. The IRS has confirmed the floor first applies in 2026 and that amounts below it are simply lost. A donor who gives less than half a percent of income now gets no deduction whatsoever — not a reduced one.
More on the 2026 tax figures: the 2026 charitable deduction for non-itemizers.
Publication 505 worksheets for 2026: Estimated Charitable Contribution Deduction Worksheet 2-5 and Overall Limitation on Itemized Deductions Worksheet 2-6.
More on the 2027 tax figures: the 2027 charitable deduction for non-itemizers and the 2027 scholarship tax credit.
IRS worksheets read line by line: Pub 526 Worksheet 2.
IRS worksheets read line by line: W-4 Deductions Worksheet.
Read box by box from the IRS form text: Form 1098-C boxes 4a to 5b and Form 1098-C boxes 6a to 7.
More IRS forms and schedules, read line by line: Form 8283 instructions.
How the floor works
It operates like the medical-expense floor: you deduct only what exceeds the threshold. Give less than 0.5% of your contribution base and the entire amount falls under it.
| Your giving vs contribution base | Deductible |
|---|---|
| Below 0.5% | Nothing |
| Above 0.5% | Only the excess over the floor |
Two things changed for 2026 and most guidance has not caught up. First, IRC §170(b)(1)(I) now imposes a floor of 0.5% of your contribution base — the first half-percent of your giving is not deductible at all, and the IRS has confirmed amounts below the floor are simply lost. Second, IRC §68 was rewritten to cap the benefit of itemized deductions, so a taxpayer in the top bracket now recovers at most 35 cents per charitable dollar rather than 37. Both come from P.L. 119-21 — the same act that rewrote the QSBS rules.
Where this sits in your own return
A published figure is a fixed point; how it lands depends on the rest of your income, your accounts and your timing, and an adviser can look at those together with you.
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What it changes about how to give
The floor rewards concentration. Giving the same total across two years crosses the floor twice and loses it twice; giving it in one year crosses once. That is the arithmetic behind bunching, and the floor strengthens it considerably relative to the pre-2026 rules. A donor-advised fund is the usual mechanism for bunching, because the deduction is taken when the fund receives the money rather than when the charity does.
Carryforwards. IRC §170(d)(1)(C) addresses this. An amount disallowed by the 0.5% floor is added to a carryforward only in a year that already has an excess carried forward under one of the percentage-limit carryover rules, such as the 50% limit in §170(d)(1)(A). In a year with no such excess, an amount disallowed by the floor is not carried forward.
No dollar figures appear here, and that is deliberate. The QCD annual cap is inflation-indexed and the figure printed in IRC §408(d)(8)(A) is the original un-indexed amount, which the statute will keep reciting forever. AGI ceilings are percentages, not amounts. Take current dollar limits from the IRS for the year in question, never from an article.
Sources
IRC §170(b)(1)(A), (b)(1)(C), (b)(1)(D), (b)(1)(G), (b)(1)(I) and (d)(1); §170(e)(1) and (e)(5); §170(f)(11) (appraisal); §68 as amended; §408(d)(8) (qualified charitable distributions); §4966(d)(2) (donor-advised funds); §664(d)(1) and (d)(2) (charitable remainder trusts). Amendments from P.L. 119-21. IRS Publication 505 (2026) for the 0.5% floor’s first application year. All read July 2026.
Figures verified against 26 U.S.C. 170 and 68 and IRS Publication 505 (2026) on September 29, 2026.
This states what the cited authority says. It is not tax advice, and retirement-plan design turns on facts about your business and your other entities that no page can see. Every dollar limit referenced here is indexed and changes annually.