The New 0.5% AGI Floor on Itemized Charitable Gifts (2026)
New for 2026: itemizers can only deduct charitable gifts above 0.5% of their income.
Estimate your non-itemizer charitable deduction
Beginning in 2026, the OBBBA adds a 0.5%-of-AGI floor to itemized charitable deductions: you can only deduct the portion of your gifts that exceeds 0.5% of your adjusted gross income. For example, at $200,000 AGI the first $1,000 of giving isn't deductible when you itemize. It's a modest haircut for most, but it makes bunching giving into fewer years even more valuable.
Alongside the new non-itemizer charitable deduction, the OBBBA added a floor for people who itemize: starting in 2026, only charitable gifts above 0.5% of your adjusted gross income are deductible. The first slice of giving — 0.5% of AGI — no longer counts.
The floor is small in percentage terms but real. It mostly nudges strategy: because a fixed floor applies each year you itemize, concentrating gifts into fewer, larger years (bunching) spreads that floor over less of your giving.
How the 0.5% floor works
Multiply your AGI by 0.5% to get the floor. Subtract it from your total itemized charitable gifts; only the remainder is deductible. The floor resets each year, so it applies every year you itemize charitable gifts.
| AGI | 0.5% floor | Gift | Deductible |
|---|---|---|---|
| $100,000 | $500 | $5,000 | $4,500 |
| $200,000 | $1,000 | $5,000 | $4,000 |
| $400,000 | $2,000 | $20,000 | $18,000 |
Who it affects — and how to respond
The floor only applies to itemizers, so if you take the standard deduction and use the $1,000/$2,000 non-itemizer deduction, it doesn't touch you. For itemizers, the practical response is bunching: by giving several years' worth in one year, you subtract the 0.5% floor once instead of every year — capturing more of your gifts as a deduction.
Frequently asked questions
What is the 0.5% AGI floor on charitable deductions?
Starting 2026, itemizers can only deduct charitable gifts that exceed 0.5% of their adjusted gross income. The first 0.5% of AGI worth of giving isn't deductible when you itemize.
Does the floor affect the non-itemizer deduction?
No. The 0.5% floor applies only to itemized charitable deductions on Schedule A. The separate $1,000/$2,000 above-the-line deduction for non-itemizers is unaffected.
How do I minimize the impact of the floor?
Bunch your giving into fewer, larger years. Since the 0.5% floor applies each year you itemize, concentrating gifts means you subtract the floor once rather than repeatedly.
When did the 0.5% floor start?
It applies beginning with tax year 2026 under the One Big Beautiful Bill Act.
IRS sources & verification
Last reviewed July 12, 2026.