2026 is officially here, and with it comes a series of changes to how nonprofit organizations like REACH (and those who donate to them) handle taxes and charitable donations. As always, you can view REACH’s latest financials and tax reports, which we’re required to disclose as part of our 501 (c)(3) tax-exempt nonprofit status.
The changes being implemented are part of the One Big Beautiful Bill Act, a piece of legislation that was passed by Congress and signed into law back in July of 2025. The bill makes substantial changes to existing U.S. tax laws, covering individuals, corporations, tax credits, business income taxes, estate and gift taxes, and more.
We’ve categorized the major changes relating to nonprofit taxes and donations below, covering how they’ll affect itemized taxes, non-itemized taxes, corporate donations, and estate planning.
Itemized Deductions
- Tax benefits will only apply for charitable giving that exceeds 0.5% of a donor's adjusted gross income (AGI). As an example, a donor with an AGI of $200,000 would only be able to deduct giving in excess of $1,000.
- The deduction rate for donors in the top income bracket will be lowered from $0.37 to $0.35 per dollar donated, effectively capping the tax benefit at 35%. Donations made in 2025 will still get the current 37% tax benefit rate.
Non-Itemized Deductions
- Taxpayers who don't itemize will be able to deduct up to $1,000 (if they're filing as an individual) or $2,000 (if they're filing jointly) thanks to the reinstating of the universal charitable deduction.
Estate Planning
- The estate tax exemption will become permanent and will be raised from $14 million for individuals and $28 million for couples to $15 million for individuals and $30 million for couples.
- Tax exemptions for estate planning will be indexed for inflation starting in 2027.
Corporate Donations
- Starting in 2026, corporations will need to contribute at least 1% of their taxable income to qualify for a charitable tax deduction.
- Only donations above the 1% floor will be deductible.
How Do the Changes Affect Donors?
If you’re an individual donor who regularly gives to charitable nonprofits, the above changes are worth paying attention to, especially if you also contribute to a Donor Advised Fund (or you’re thinking of starting one). Business owners who support philanthropic or charitable efforts through their corporations will also want to note the new 1% taxable income minimum if they’re hoping to qualify for the charitable tax deduction in 2026.
For more information on Donor Advised Funds, you can visit our DAF summary webpage. Be sure to also consult with your broker or financial advisor on how you can best leverage the new 2026 tax changes for your own benefit and for the benefit of the nonprofits you support.
