The two changes
| Federal | Massachusetts | |
|---|---|---|
| Non-itemizers | New deduction for cash gifts to eligible charities, up to $1,000 ($2,000 joint) | Does not follow (TIR 26-4) |
| Itemizers | Only gifts above 0.5% of AGI are deductible; the excess below the floor may carry over | Does not follow (TIR 26-4) |
| First year | 2026 returns (filed in 2027) | Not applicable |
| 2025 returns | Old rules; no non-itemizer deduction | Not applicable |
For people who take the standard deduction
Most households have not itemized since 2018, which meant charitable gifts brought no federal tax benefit. From 2026, they can deduct cash contributions to eligible tax-exempt organizations up to $1,000, or $2,000 on a joint return, without itemizing.
The statute limits it to gifts made in cash to public charities and similar organizations. Gifts of property do not count, and neither do cash gifts to supporting organizations or to set up or add to a donor-advised fund.
Illustrative example. A married couple in Bridgewater who take the $32,200 standard deduction for 2026 give $1,500 in cash to their church and a local food pantry. They can deduct the full $1,500 federally, under the $2,000 joint limit. In 2025, the same gifts would have produced no federal deduction.
For people who itemize: the 0.5% floor
From 2026, itemizers can deduct only the part of their charitable gifts that exceeds 0.5% of adjusted gross income. The IRS says any amount below the floor is added to any charitable contribution carryover, so it may be usable in a later year. This limit applies on top of the new overall limit on itemized deductions for top-bracket taxpayers.
The floor is small for most people but noticeable at higher incomes. At $400,000 of AGI, the first $2,000 of gifts produces no current deduction.
- 0.5% of $100,000 AGI: the first $500 of gifts is not deductible
- 0.5% of $250,000 AGI: the first $1,250
- 0.5% of $400,000 AGI: the first $2,000
What to consider before December 2026
Because 2025 is the last year under the old rules, the choices this December are about 2026. Itemizers may want to group several years of giving into one year so more of it clears the floor. Non-itemizers can simply keep receipts, since cash gifts now count federally up to the limit.
Whatever you decide, the records are the same: a bank record or written acknowledgment for each cash gift, and, for any single contribution of $250 or more, a written acknowledgment from the charity obtained by the time you file.
- 1.Decide whether you expect to itemize for 2026. With the higher SALT cap, more Massachusetts homeowners may.
- 2.If you do not itemize, keep receipts for cash gifts up to $1,000 ($2,000 joint).
- 3.If you itemize, estimate 0.5% of your AGI and consider whether to bunch gifts.
- 4.Get written acknowledgments for larger gifts before you file.
Massachusetts
Massachusetts said in TIR 26-4 that it does not conform to either the non-itemizer deduction or the 0.5% floor. It also does not allow federal itemized deductions in general. How charitable gifts are treated on the Form 1 is set by Massachusetts law and the Form 1 instructions for the year, not by these federal changes.
Where we come in
We compare itemizing with the standard deduction each year and apply the charitable rules that fit. If you want to plan 2026 giving before year-end, talk to us in the fall rather than in April. Before we start, we give you a scope and a price in writing.
Figures on this page were checked against the IRS and Massachusetts sources listed alongside on 28 Sep 2026. They change — confirm the current amount before relying on one.
General information for owner-led businesses, not advice for your specific situation. Tax and accounting rules change, and how they apply depends on facts particular to your business. Talk to us — or to another qualified professional — before acting on anything here.
