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Corporate tax rules for charitable contributions are changing, and for banking and capital markets organizations, how and when contributions are made will matter more than ever. In this episode, Denise Schwieger and Monic Kechik unpack the introduction of a new 1% floor on deductible charitable contributions and what it could mean for financial institutions with established giving programs, exploring how the new tax threshold interacts with community investment strategies and why organizations may need to reassess contribution timing, structures, classification, and financial reporting as they adapt to the evolving tax rules.
Key takeaways
- New deductibility threshold: Corporations can only deduct charitable contributions exceeding 1% of taxable income, while the existing 10% cap remains in place.
- Strategic timing matters more than ever: “Bunching” contributions into specific tax years may help organizations maximize deductibility.
- Reclassification opportunities: Certain payments (e.g., sponsorships) may qualify as business expenses, depending on facts and circumstances.
- Financial reporting implications: Reduced deductibility may increase effective tax rates and require reassessment of deferred tax assets
Segmented topics with timestamps:
- 00:00 – Introduction
- 00:45 – What’s changing in 2026
- 01:26 – Why this matters for banks
- 02:05 – Carryover mechanics
- 02:39 – Planning for 2026 and beyond
- 03:41 – Use of foundations and donor-advised funds
- 04:42 – Reclassifying payments as business expenses
- 05:50 – Financial reporting considerations
- 06:56 – Key takeaway & closing
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