Office of Advancement

Key Changes Starting in 2026

• Standard deduction increases: In 2025, the standard deduction is $15,750 (single) and $31,500 (married). In 2026, it will rise to $16,550 and $33,100. As fewer taxpayers itemize, some donors may find it advantageous to “bunch” charitable gifts into one year or use a DAF to maximize deductions.
• Additional deduction for older taxpayers: Individuals age 65 or older can claim an extra $6,000 deduction, though this phases out for higher-income taxpayers.
• New deduction for non-itemizers: Beginning in 2026, taxpayers who do not itemize may still deduct up to $1,000 (single) or $2,000 (married) in cash gifts to qualified public charities, though this will not apply to DAF contributions.
• Gifts of appreciated assets remain advantageous: Donating long-term appreciated stock or real estate will continue to qualify for a full deduction, offering an efficient way to give even for those who do not itemize.

Changes Affecting Larger Gifts

• 60% of income limit continues: Cash gifts to public charities will remain deductible up to 60% of adjusted gross income (AGI). Combining cash gifts with contributions of stock or real estate remains a tax-efficient strategy.
• New 0.5% “floor”: Starting in 2026, only the portion of your charitable contributions that exceeds 0.5% of your AGI will be deductible. Unused deductions may be carried forward for up to five years.
• Cap on deduction value: The value of charitable deductions will be capped at the tax savings associated with the 35% bracket, even for those in higher brackets.

What This Means for Donors
The upcoming changes may make 2025 an especially good year to complete or accelerate your giving plans. For example:

• Bunching or Adding to a Donor-Advised Fund: If you typically make annual gifts, you might consider combining two years of giving—or adding to your donor-advised fund—before December 31, 2025. Acting this year allows you to take advantage of the current deduction rules, which are more favorable than those starting in 2026. By giving in 2025, you can maximize both your impact and your potential deduction.
• Completing a Pledge or Major Gift in 2025: If you have a multi-year pledge or are planning a larger contribution, completing it before the end of 2025 ensures the entire amount qualifies under today’s rules. Beginning in 2026, new deduction floors and caps may lessen the benefit of large gifts, so acting now can help you receive the greatest possible tax advantage while supporting Illinois Tech’s mission.

We encourage you to consult your tax advisor about these changes. If you would like to explore how your philanthropy can continue to advance Illinois Tech’s mission, please contact us at 312.567.5000. Remember to act before December 31, 2025 to take advantage of current giving rules. Thank you for your partnership in shaping the future of Illinois Tech.