Federal tax changes are coming for 2026

Thank you for considering a donation to Thomas Edison State University Foundation in support of future TESU graduates. We are grateful for your connection to the institution. This support makes it possible for us to continue the important work of Building Careers, Advancing Professions, and Empowering Lives.

The Details

Given the recently signed federal tax legislation, many current tax provisions and the introduction of new regulations could influence your charitable giving. These changes are in effect as of January 1, 2026.
  • What is New

    Tax break for non-itemizers: You can deduct up to $1,000 (individuals) or $2,000 (married couples) for charitable gifts, even if you don’t itemize.

    If you do itemize, there is a new floor on your charitable deduction: The new law adds a minimum charitable contribution rate if you itemize your deductions. The law requires taxpayers to give at least 0.5% of their Adjusted Gross Income to receive a tax benefit for their charitable giving.

    If you are in the top tax bracket, there’s a new charitable contribution limitation: Under current law, top earners receive a 37-cent tax benefit for every $1 deducted. Beginning in 2026, that benefit will be capped at 35 cents per dollar.

  • What is Staying

    Tax brackets: The new law permanently extends the 10%, 12%, 22%, 24%, 35% and 37% tax rates.

    Standard deduction: Most taxpayers will continue to use the elevated standard deduction - $15,750 (individuals) and $31,500 (married couples) in 2025. It will be indexed for inflation thereafter.

    Deduction limits for cash gifts: You can continue to deduct cash gifts to public charities up to 60% of your AGI if you itemize.

    Estate tax exemption: The federal estate and gift tax exemption will remain high and increase to $15 million per individual (indexed annually)

  • Key Notes

    It may be worth considering accelerating your gift in 2025.

    Non-cash gifts may lead to greater impact for you and TESU as legislation introduces new complexities for itemizers.

    Talk with your financial advisor. Seek guidance from those that assist with your taxes and financial planning to make the best decisions regarding your philanthropic support.

    Talk with TESU Foundation staff. The team is available to explore tax-smart options and to work with your financial and legal team.