Exempt organization inflation adjusted items for 2026
Annual revenue procedure announces modest increases
Rev. Proc. 2025-32 provides annual inflation adjustments for tax years beginning in 2026, reflecting slight increases over 2025 amounts. Highlights include the following:
- Exempt organizations with fundraising, lobbying expenses, or annual dues paid by agricultural or horticultural organization members may be affected.
- Flexible spending accounts and qualified transportation fringe benefits are also among the items in which exempt organizations, as employers, may be interested.
- The daily delinquency penalty for failure to timely file Form 990 series information returns increases to $135 for large organizations.
The IRS also released Notice 2025-67, which modifies the annual limits for retirement plans and fringe benefits. Read RSM US’s insight article.
Inflation adjustments for 2026 impacting exempt organizations
The annual inflation adjustments applicable to tax years beginning in 2026 (typically, returns filed in 2027) affect more than 60 tax provisions, including those of interest to exempt organizations. Amounts increased slightly for 2026. Exempt organizations may be impacted by the following items:
| Inflation Adjusted Item | 2026 Amount | 2025 Amount |
|---|---|---|
| Agricultural or horticultural organizations | ||
| Dues paid by members excluded from unrelated business income | $212 | $207 |
| Low cost articles | ||
| Cost of items for purposes of determining unrelated trade or business | $13.90 | $13.60 |
| Insubstantial benefits | ||
| Value of benefits received by a donor without reducing the value of the charitable contribution deduction | $13.90, $69.50 and $139 | $13.60, $68, and $136 |
| Nondeductible lobbying expenditures | ||
| Dues limitation to except an exempt organization from the proxy tax reporting requirement | $147 or less | $143 or less |
| Failure to file Form 990-T | ||
| Minimum tax that applies for failure to file within 60 days of the due date | $535 | $525 |
| Failure to file Forms 990, 990-EZ or 990-PF | ||
| Large organization threshold | $1,339,500 | $1,309,500 |
| Daily delinquency penalty for large organizations | $130 | $130 |
| Daily delinquency penalty for all others | $66,500 / $25 / $13,000 | $65,000 / $25 / $12,500 |
As employers, exempt organizations may also be interested in the following items:
| Inflation Adjusted Item | 2026 Amount | 2025 Amount |
|---|---|---|
| Flexible spending accounts (FSAs) | ||
| Pre-tax deduction annual limit | $3,400 | $3,300 |
| Maximum carryover amount (if permitted by the plan) | $680 | $660 |
| Qualified transportation fringe benefits | ||
| Pre-tax or excluded monthly limit | $340 | $325 |
| Highly compensated employee | $160,000 | $160,000 |
| 401(k), 403(b), and 457 elective deferral limit | $24,500 | $23,500 |
With the introduction of a charitable contribution deduction for non-itemizers and a new charitable deduction floor, charitably-inclined taxpayers may be interested in the following items:
| Inflation Adjusted Item | 2026 Amount | 2025 Amount |
|---|---|---|
| Standard deduction | ||
| Single | $16,100 | $15,750 |
| Head of household | $24,150 | $23,625 |
| Married filing joint return | $32,200 | $31,500 |
| IRA qualified charitable distribution (QCD) | ||
| Annual amount to public charities | $111,000 | $108,000 |
| One-time amount to split-interest trust | $55,000 | $54,000 |
Related insights
- /insights/tax-alerts/2025/eo-exempt-organization-matters
- /insights/tax-alerts/2025/obbba-tax-exempt-orgs
- /insights/tax-alerts/2025/irs-retirement-fringe-benefit-limitations