Tax Code 170: Deduction Limits, Substantiation, and Reporting

Section 170 of the Internal Revenue Code sets the rules and limits for deducting charitable contributions on your federal return. If you itemize, you subtract qualifying gifts from your adjusted gross income within percentage caps tied to what you gave and who received it. Starting in 2026, three significant changes reshape the deduction: a new write-off for non-itemizers, a 0.5% AGI floor for itemizers, and a permanent 60% cap on cash gifts to public charities.¹

What Changed for 2026

The One Big Beautiful Bill Act altered charitable deduction rules in three ways that took effect for the 2026 tax year, and each one hits a different type of donor.

Non-itemizers now get a deduction they never had before. Single filers can deduct up to $1,000 in cash contributions to public charities on top of the standard deduction. Married couples filing jointly can deduct up to $2,000. Contributions to donor-advised funds and supporting organizations don’t count.¹ With the 2026 standard deduction sitting at $16,100 for single filers and $32,200 for joint filers, most taxpayers don’t itemize, so this modest benefit reaches a much wider group of donors.²

Itemizers face a new floor. Only the portion of your contributions that exceeds 0.5% of AGI is deductible. If you earn $150,000 and donate $2,000, the first $750 produces nothing; you deduct $1,250. For moderate donors, this floor can wipe out the charitable deduction entirely.

The 60% AGI ceiling on cash gifts to public charities, which was set to expire at the end of 2025, is now permanent.³

Which Organizations Qualify

A gift is only deductible if the recipient holds tax-exempt status recognized by the IRS. The largest category is organizations exempt under Section 501(c)(3): religious institutions, schools, hospitals, and scientific research organizations.⁴ Federal, state, and local government entities qualify when the gift serves an exclusively public purpose. Certain veterans’ organizations and domestic fraternal societies also qualify when the funds are used for charitable purposes.

Verify the organization’s status through the IRS Tax Exempt Organization Search before you give. That tool confirms whether the group holds a current determination letter and whether contributions to it are deductible.⁵ Plenty of groups sound charitable but lack the right status, and the IRS won’t allow a deduction for a gift to an unqualified recipient no matter how worthy the cause.

Donor-advised funds are a special case. You can still claim an itemized deduction for a DAF contribution, but DAF gifts are specifically excluded from the new non-itemizer deduction.¹ The sponsoring organization must provide a written acknowledgment confirming it has exclusive legal control over the donated assets.

What Counts as a Deductible Gift

Cash is the simplest category. Checks, credit card charges, electronic transfers, payroll deductions, and gift cards redeemable for cash all qualify as monetary contributions.⁶

Property donations are deductible too, but with conditions. Clothing and household items must generally be in good used condition or better. The one exception: if an item is worth more than $500 and you obtain a qualified appraisal, you can deduct it even if its condition is below that standard.⁷ Non-cash items are valued at fair market value, meaning the price a willing buyer and seller would agree on in an open transaction.⁸

Volunteer expenses fall into a narrow slot. You can’t deduct the value of your time, but you can deduct unreimbursed out-of-pocket costs directly tied to the volunteer work, such as supplies or transportation. The standard mileage rate for charitable driving is 14 cents per mile in 2026.⁹ The rate is set by statute and doesn’t adjust for inflation, which is why it has held at 14 cents while business mileage has climbed to 72.5 cents.

What Section 170 Won’t Let You Deduct

Several payments feel charitable but aren’t deductible. Gifts directly to individuals never qualify, no matter how needy the recipient. This includes crowdfunding campaigns that benefit a specific person rather than a qualified organization.⁸

The value of your time and professional services is also non-deductible. An accountant who spends 20 hours doing free tax prep for a nonprofit can’t deduct $5,000 based on a $250 hourly rate. Only actual out-of-pocket costs count.

Other items excluded from Section 170 include political contributions, lobbying expenses, raffle and lottery tickets, and tuition payments. Partial-interest gifts are generally disallowed as well; donating the right to use one floor of a building you own doesn’t produce a deduction. The main exceptions are remainder interests in a personal residence or farm, undivided portions of your entire interest, and qualified conservation easements.¹

Quid Pro Quo Contributions

When a charity gives you something in exchange for your gift, you deduct only the amount that exceeds the fair market value of what you received. A $500 payment that gets you a $100 tote bag produces a $400 deduction. A $200 gala ticket where the dinner is worth $75 produces $125.

Charities must provide a written disclosure statement for any quid pro quo contribution over $75. That statement has to tell you the deductible amount is limited to the excess over the benefit’s value and include a good-faith estimate of that value.¹⁰

Small thank-you items are ignored. For 2026, a benefit is insubstantial if its fair market value doesn’t exceed the lesser of 2% of the donation or $139. Alternatively, if you give at least $69.50 and the only benefit is a token item bearing the charity’s logo that cost the organization $13.90 or less, the full contribution remains deductible.

AGI Percentage Limits and Carryovers

Even a fully qualifying contribution is capped each year at a percentage of your AGI, and the ceiling depends on the type of gift and the type of recipient:

60% of AGI for cash contributions to public charities, including churches, schools, hospitals, and government entities.³
50% of AGI as the general combined limit for all contributions to public charities, including non-cash property valued at basis rather than fair market value.
30% of AGI for appreciated capital gain property given to public charities, or cash gifts to certain private foundations and veterans’ organizations.¹¹
20% of AGI for appreciated capital gain property given to private non-operating foundations.¹¹

Most donors who give only cash to mainstream charities are effectively limited to 60% of AGI. If your total gifts exceed the applicable ceiling, you can carry the excess forward for up to five years.¹¹ Current-year gifts are applied first, and carryover amounts are used in the order they arose. Losing track of carryforwards is easy, particularly after a one-time large gift like a donation of appreciated stock, so record the amount somewhere you’ll find it next filing season.

Substantiation Rules by Dollar Threshold

Documentation requirements escalate with the size of the gift, and missing paperwork is the single most common reason the IRS disallows charitable deductions on audit.

Cash Gifts of Any Amount

You need a bank record or written communication from the charity showing its name, the date, and the amount. A canceled check or credit card statement will do. Cash dropped into a collection plate with no receipt won’t, regardless of how small.⁸

Contributions of $250 or More

Any single contribution of $250 or more requires a contemporaneous written acknowledgment from the charity. It must show the organization’s name, the cash amount or a description of any non-cash property, and a statement about whether goods or services were provided in return. If something was provided, the acknowledgment must include a good-faith value estimate.¹² You must have this document in hand before you file.

Non-Cash Property Over $500

When total non-cash deductions exceed $500, complete Form 8283 and attach it to your return. Section A of the form covers items valued at $5,000 or less and requires a description of the property, its condition, and how you determined its value.¹³

Non-Cash Property Over $5,000

Gifts valued above $5,000 require a qualified appraisal and Section B of Form 8283. The charity must sign the form confirming receipt. The appraisal has to be signed and dated no earlier than 60 days before the contribution date and no later than the due date (including extensions) of the return on which the deduction is first claimed.¹⁴ A qualified appraiser must have verifiable education and experience in valuing the type of property involved and must follow generally accepted appraisal standards. The appraiser can’t charge a fee based on a percentage of the appraised value.

How Long to Keep Records

Retain receipts, acknowledgments, and appraisals for at least three years after the filing date of the return that claimed the deduction. That matches the standard period during which the IRS can assess additional tax.¹⁵ If you’re carrying forward unused deductions, hold the records until three years after the final carryover year.

Vehicles, Boats, and Airplanes

Vehicle donations have their own rules, and the IRS scrutinizes them closely because the deductions were widely abused before Congress tightened the law. If the charity sells the vehicle without significant use or material improvement, your deduction is limited to whatever the charity actually received from the sale, not the vehicle’s estimated fair market value.¹⁶

For any vehicle deduction over $500, you must receive Form 1098-C from the charity and attach Copy B to your return. E-filers either attach it as a PDF or mail it with Form 8453. Skip this step and the IRS will disallow the deduction outright.¹⁶ The charity has 30 days after the sale, or 30 days after the contribution if it plans to keep the vehicle, to provide the form.

Qualified Charitable Distributions From IRAs

Donors 70½ or older can transfer up to $111,000 directly from a traditional IRA to a qualified charity in 2026. This is a qualified charitable distribution, and the amount is excluded from taxable income entirely. On a joint return, each spouse can move up to $111,000 from their own IRA.¹⁷

QCDs count toward required minimum distributions, which makes them particularly useful for retirees who don’t need the IRA income. The transfer must move directly from the IRA trustee to the charity. If the funds pass through your hands first, they become taxable income and you’re left claiming a regular deduction instead, which is generally a worse outcome. QCDs also aren’t subject to the new 0.5% AGI floor or the percentage ceilings on regular deductions, because the income is excluded rather than deducted.

How to Report Contributions on Your Return

Itemizers report charitable deductions on Schedule A of Form 1040. The form separates cash contributions on Line 11 from non-cash contributions on Line 12, with prior-year carryovers on Line 13.¹⁸ If total non-cash deductions exceed $500, attach Form 8283.¹¹

Non-itemizers claiming the new above-the-line deduction report it separately from Schedule A, since the point is that you’re taking the standard deduction. That deduction applies only to cash gifts to public charities and is capped at $1,000 for single filers and $2,000 for joint returns.¹

Keep documentation organized by year and type. The IRS generally has three years from your filing date to question a return.¹⁹ Clean records assembled at the time of the gift are far easier to produce than ones reconstructed after an IRS notice arrives.

1
Office of the Law Revision Counsel. 26 U.S. Code 170 – Charitable, Etc., Contributions and Gifts
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Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
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Office of the Law Revision Counsel. 26 USC 170 – Charitable, Etc., Contributions and Gifts
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Internal Revenue Service. Exempt Organization Types
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Internal Revenue Service. Charities and Nonprofits
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Internal Revenue Service. Charitable Contributions – Substantiation and Disclosure Requirements
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Internal Revenue Service. Publication 561 – Determining the Value of Donated Property
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Internal Revenue Service. Topic No. 506, Charitable Contributions
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Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate
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Internal Revenue Service. Life Cycle of a Private Foundation – Quid Pro Quo Contributions
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Internal Revenue Service. Publication 526 – Charitable Contributions
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Internal Revenue Service. Charitable Contributions – Written Acknowledgments
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Internal Revenue Service. Form 8283 – Noncash Charitable Contributions
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eCFR. 26 CFR 1.170A-17 – Qualified Appraisal and Qualified Appraiser
15
Internal Revenue Service. Topic No. 305, Recordkeeping
16
Internal Revenue Service. Form 1098-C – Contributions of Motor Vehicles, Boats, and Airplanes
17
EveryCRSReport.com. Qualified Charitable Distributions from Individual Retirement Accounts
18
Internal Revenue Service. Instructions for Schedule A (Form 1040) – Section: Gifts to Charity
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Internal Revenue Service. How Long Should I Keep Records