At Hudson Community Foundation (HCF), we work with business leaders and owners to structure charitable giving plans that support both corporate goals and community impact. Whether your corporate clients give directly to local nonprofits or organize philanthropy through a corporate fund at HCF, thoughtful planning has always mattered. In 2026, it matters even more.
Attorneys, CPAs, or financial advisors, are aware that new rules governing corporate charitable deductions are now in place. These changes are significant, and they are already influencing how companies approach giving. The good news is that with a bit of planning and the right partners your business clients can continue to support the causes they care about in a way that is both impactful and tax efficient.
Here are key points for charitable corporate clients:
The new 1% “floor” is now a reality.
As of January 1, 2026, corporations may deduct charitable contributions only to the extent that total giving exceeds 1% of taxable income. This means that a company with $100 million in taxable income must contribute more than $1 million before any portion of its charitable giving becomes deductible and even then, only the amount above that threshold qualifies for a deduction.
Gifts that previously generated a tax benefit may no longer do so unless they are structured differently or timed strategically. This is where the HCF can help. By working with our team, corporate clients can evaluate whether to concentrate their giving in certain years, use a corporate donor-advised fund to manage timing, or align contributions with broader financial planning goals. In some cases, bundling multiple years of anticipated giving into a single year may help exceed the threshold and unlock a deduction that would otherwise be lost.
The 10% “ceiling” still applies and now interacts with the floor.
The long-standing rule allowing corporations to deduct charitable contributions up to 10% of taxable income remains in place. However, now that the 1% floor is also in effect both rules must be considered together. Only the portion of giving that falls between 1% and 10% of taxable income is deductible in a given year.
Amounts that fall below the floor or exceed the ceiling are not lost, but they are subject to carryforward rules for up to five years. Even so, using those carryforwards effectively requires careful coordination. In any future year, deductions are available only if total giving again exceeds the 1% floor and the combined total of current and carried-forward contributions remains within the 10% cap.
This layering of rules adds complexity, especially for companies with fluctuating income or evolving giving priorities. HCF can serve as a central hub for tracking, coordinating, and implementing strategies over time. For example, a corporate donor-advised fund can help your business client separate the timing of tax recognition from the timing of grantmaking, allowing you to support nonprofits consistently while managing deductions more intentionally.
Timing and structure matter more than ever.
Now that these rules are in effect, taking a “set it and forget it” approach to corporate giving may lead to missed opportunities. Instead, this is an ideal time for businesses to revisit their company’s overall philanthropic strategy.
Working with Hudson Community Foundation, you can model different scenarios based on projected income and giving levels. You can explore how a corporate fund might help smooth out year-to-year variations, ensuring that charitable dollars continue to flow to the charities that matter most to you even when tax considerations shift. In addition, the HCF team can help align giving strategies with the company’s broader goals, including employee engagement, community visibility, and long-term impact.
Don’t overlook sponsorship opportunities.
It’s also important to remember that not all support for charitable organizations is treated the same way for tax purposes. Payments that provide a direct business benefit such as advertising or brand visibility may be deductible as ordinary business expenses rather than as charitable contributions if the payment provides a direct business benefit, such as advertising, rather than being considered a pure charitable donation. Under IRS rules, a business must substantiate the benefit received.
As always, our goal at Hudson Community Foundation is to serve as your first choice on all matters related to charitable giving as you or your advisor structure tax, estate, retirement, or business planning strategies. We look forward to working together during tax season and beyond!
The team at the HCF looks forward to working with you and your clients to establish (or update) bequests to fulfill your clients’ charitable legacies. Give us a call!
Read more about Donors Guide to Donor Advised Funds.
With a fund at Hudson Community Foundation (HCF), advisors can manage the charitable assets on their preferred platform at any amount. Assets stay under your management. You can provide your clients with the consistent investment advice they expect. We are your partner in charitable giving!
The team at HCF is a resource as you serve your philanthropic clients. We understand the charitable side and are happy to serve as a secondary source as you manage the primary relationship with your clients. This blog is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.
