When a charitable gift is larger than the share of income the tax code lets you deduct in a single year, the excess doesn’t vanish. The 5-year charitable contribution carryover lets you apply that leftover amount on your returns for up to five additional tax years, subject to the same percentage-of-AGI limits that created the overflow in the first place. After the fifth year, whatever hasn’t been used is gone.
Here is how the mechanics actually play out, and what changes for gifts made in 2026 under the One Big Beautiful Bill Act.
What Creates a Carryover in the First Place
A carryover exists only because annual deduction ceilings cap how much of a gift you can write off right away. Those ceilings are expressed as a percentage of adjusted gross income, and they depend on what you gave and who received it:
- 60% of AGI for cash contributions to public charities (churches, hospitals, universities, most community foundations).
- 50% of AGI for noncash contributions (other than capital gain property) to those same public charities.
- 30% of AGI for long-term capital gain property (such as appreciated stock held more than a year) given to public charities at fair market value; this limit also covers cash gifts “for the use of” a public charity and cash or ordinary-income gifts to private non-operating foundations.
- 20% of AGI for capital gain property given to private non-operating foundations.
Anything above the applicable ceiling becomes a carryover. If your AGI is $200,000 and you give $150,000 in cash to a public charity, your current-year deduction tops out at $120,000, and $30,000 rolls forward.
The ceilings stack in a fixed order. The 60% and 50% contributions apply first, then 30%, then 20%. The lower-percentage categories can only use whatever AGI capacity is left after the higher ones are counted.
One threshold matter before anything else: you must itemize on Schedule A to claim a charitable deduction beyond the limited above-the-line amount described below. If your standard deduction is larger than your total itemized deductions, no current-year charitable benefit shows up on your return, though the carryover rules still apply to the amount that would have been deductible.
How the Five-Year Clock Actually Works
The clock starts the year after the gift. A 2026 contribution that generates excess can be applied in tax years 2027 through 2031. The sixth year is the cliff: anything unused on December 31 of year five disappears permanently.
Each carryover year follows a strict sequence. You first calculate your AGI-based ceiling for that year using that year’s income. Then you deduct the current year’s new contributions against that ceiling. Only after current-year gifts are fully accounted for does any remaining capacity absorb carryover amounts.
Among carryovers from different years, the oldest is used first. This FIFO rule protects your older amounts from expiring, because they’re closest to the deadline. A 2025 carryover must be fully absorbed before any 2026 carryover is touched.
Character travels with the carryover. A 30%-limit gift of appreciated stock stays a 30%-limit item in every carryover year, measured against that year’s AGI. It doesn’t convert into a 60%-limit cash contribution just because years have passed.
That has a practical consequence: income swings matter. A higher-income year raises the dollar ceiling and absorbs the carryover faster. A low-income year absorbs little, and the five-year window keeps ticking regardless.
What Changed for 2026
The 0.5% AGI Floor on Individual Giving
Beginning with tax year 2026, individual charitable deductions are allowed only to the extent they exceed 0.5% of AGI. At $300,000 of AGI, the first $1,500 of giving produces no tax benefit. Only the amount above the floor enters the percentage-limit calculation that drives your deduction and any resulting carryover. The floor is trivial for large donors; for moderate-income givers near their AGI ceiling, it compresses the deductible amount and can push more into carryover territory.
The New Reduction for High-Income Itemizers
The OBBBA permanently repealed the old Pease limitation and replaced it with a reduction for taxpayers whose AGI exceeds the threshold for the top marginal rate. The reduction equals 2/37ths of most itemized deductions, including charitable contributions. The percentage ceilings that create carryovers don’t change, but the actual tax benefit on both current-year deductions and absorbed carryovers can shrink.
A Boundary Worth Knowing: The Above-the-Line Deduction
Also starting in 2026, non-itemizers can deduct up to $1,000 ($2,000 joint) of cash gifts to qualifying public charities directly from gross income. Gifts to donor-advised funds and private non-operating foundations don’t qualify. This deduction sits outside the itemized system; it does not create a carryover and does not interact with one.
Appreciated Property Generates Carryovers Most Often
Donating long-term appreciated stock or real estate to a public charity is tax-efficient, but it runs into the 30% ceiling more easily than cash does, so it generates carryovers more frequently.
You have an election: reduce the deduction from fair market value down to your cost basis, which lifts your ceiling from 30% to 50% of AGI. The trade-off cuts both ways. On stock that has tripled in value, 30% of the full value usually produces a larger deduction over time than 50% of basis, even counting the carryover. If you expect income to drop sharply in later years, claiming a bigger piece now at basis can be the better math.
The election is all-or-nothing for the year. If you make it, every capital gain property gift to public charities that year gets reduced to basis. You can’t pick which ones.
Capital gain property given to a private non-operating foundation faces the 20% ceiling (or the excess of 30% of AGI over any capital gain gifts already counted under the 30% public-charity limit, whichever is less). These carryovers are applied last among the categories and still expire after five years.
What Can End or Shrink Your Carryover Early
Death of the Donor
A charitable carryover does not survive the donor. It cannot pass to the estate, heirs, or anyone else. It can be claimed on the decedent’s final return, but any balance left after that is lost.
For couples who filed jointly, the loss is partial. Treasury regulations require the remaining carryover to be allocated between the spouses as if they had filed separately in the original contribution year. The surviving spouse keeps only the portion traceable to their own gifts. The deceased spouse’s share disappears.
Divorce
Divorcing couples with an outstanding joint carryover must divide it the same way: by recomputing the original contributions as though filed separately and giving each ex-spouse the portion attributable to their own gifts. The allocation is prescribed by regulation and isn’t open to negotiation in a settlement.
A Year on the Standard Deduction
If you take the standard deduction in a carryover year, you can’t claim any carryover that year, but the year still counts against your five-year window. The carryover isn’t automatically forfeited; if you itemize again later within the window, you can resume using it. The risk is real: two or three consecutive standard-deduction years can consume most of the window with no benefit.
Net Operating Losses
If an NOL reduces taxable income to zero, no charitable deduction is allowed for that year. For corporations the interaction is particularly tangled, and charitable carryovers can effectively convert into NOL carryovers in some situations. Dealing with both at once almost always calls for professional help.
Corporations Follow the Same Framework With Different Numbers
C corporations use the same five-year carryover structure, but with a 10% ceiling on taxable income (computed before the charitable deduction, the dividends-received deduction, NOL carrybacks, and certain other items).
For tax years beginning after 2025, the OBBBA added a 1% floor beneath the 10% ceiling. Corporate contributions are now deductible only to the extent they exceed 1% of taxable income and don’t exceed 10%. A company with $5 million in taxable income that gives $400,000 gets no deduction on the first $50,000, deducts the next $350,000, and has nothing left to carry. If it gave $700,000 instead, the deductible portion is $450,000 ($500,000 ceiling minus the $50,000 floor), and $250,000 carries forward. In each carryover year, the corporation applies the same 1%-to-10% band to that year’s taxable income, with current-year gifts filling the band first and carryovers absorbing any remaining capacity FIFO.
Records You Need to Keep for Five Years
Tracking a carryover across multiple returns demands organized records from the beginning. For each contribution you need the original year, the type of property, the type of recipient, the applicable AGI percentage, the amount deducted each year, and the remaining balance. Without that paper trail, the IRS can disallow the balance.
Noncash contributions over $500 for the year require Form 8283 with the original return. You must also file Form 8283 in each carryover year you claim a deduction from that original gift. Keep the initial Form 8283 and any required qualified appraisal (needed for noncash gifts over $5,000) throughout the full carryover period.
Individuals report the deduction and track the carryover on Schedule A, whose instructions include a worksheet for the AGI limits and running balances. Corporations report on Form 1120 and should attach a statement showing the calculation and remaining balance for each contribution year.
The most common audit problem with carryovers isn’t aggressive deductions. It’s reconstructing, three or four years later, how much was used in each intervening year. A spreadsheet updated every filing season prevents that entirely.