On November 10, 2026, the IRS issued IR-2026-135, reminding taxpayers about a permanent charitable contribution deduction introduced by the Working Families Tax Cuts. Beginning with tax year 2026, eligible individuals who do not itemize deductions may claim a deduction for certain cash donations.

The announcement concerns 2026 contributions reported on returns filed in 2027. It is not a deduction for every payment to a nonprofit, and it does not mean a donation produces a dollar-for-dollar tax refund.

What Are the Limits?

The IRS lists these maximum deduction amounts for qualifying cash contributions:

  • $1,000 for eligible individuals who do not itemize.
  • $2,000 for eligible married taxpayers filing jointly who do not itemize.

These are deduction limits, not guaranteed tax savings. The provision is specifically for taxpayers who do not itemize; it should not be confused with the separate rules for charitable deductions claimed by itemizers.

Which Donations Can Qualify?

Only qualifying cash contributions to certain eligible charitable organizations count for this deduction. Noncash donations do not qualify. The release also excludes cash contributions to supporting organizations and contributions to establish or maintain a donor-advised fund.

The IRS directs taxpayers to its Tax Exempt Organization Search to check an organization’s status. Publication 6196 explains how to use the search tool’s Pub. 78 data and deductibility information. It also cautions that some eligible organizations, such as certain churches or government organizations, may not appear separately in search results. An absent result is not, by itself, proof that a donation is ineligible.

Do not assume that a nonprofit label alone makes every payment deductible. Additional eligibility requirements, contribution limits and documentation rules may apply.

Keep the Donation Records

The IRS recommends retaining receipts, canceled checks, bank records or written communications from the charity showing the organization’s name, the contribution date and the amount. Additional documentation may be required depending on the amount contributed.

Keep the records of qualifying contributions made during 2026 so that you and your preparer can review them for the 2027 filing season. A contribution limit is not a substitute for evidence that a qualifying donation was actually made.

Why Schedule C Filers Should Keep the Categories Separate

For a sole proprietor, this is an individual charitable deduction, not a new Schedule C business expense category. Do not treat a personal charitable gift as a business deduction simply because it was paid from a business account. Ask a qualified tax professional how the rules apply to your circumstances and keep personal giving records distinct from business income and expense records.

Simple-C helps Schedule C filers organize business income, expenses and supporting records. It does not verify a charity’s eligibility, determine your personal deduction or replace professional advice.

This article provides general information, not tax or legal advice. Eligibility depends on the contribution, recipient organization, documentation and applicable rules. Confirm current IRS guidance and consult a qualified professional about your situation.

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