Charitable Gift Annuity Calculator (2026): Income, Tax Deduction and What Your Charity Keeps

A charitable gift annuity is one of the few arrangements that lets you give money away and get a paycheck for life in return. You transfer cash, stock or other property to a charity; the charity signs a contract promising you a fixed payment every year until you die. Part of the gift is deductible now, part of every payment is tax-free, and whatever remains in the charity’s reserve when the contract ends is the gift itself.

This calculator prices a single-life suggested-rate gift annuity and answers the four questions donors actually ask: how much income will I receive, how big is the deduction, how much of each payment is taxed, and what does the charity keep? Adjust your age, the size of the gift and the assumptions to see how the trade-off moves.

What Is a Charitable Gift Annuity?

A charitable gift annuity is a contract, not a donation receipt. You transfer cash, securities or other property to a charity, and in exchange the charity promises to pay you a fixed amount every year for as long as you live. The charity invests your gift in its own reserve, pays your annuity out of that reserve, and keeps whatever is left when the contract ends. It is the rare arrangement where giving money away can raise your retirement income at the same time.

Almost every gift annuity issued by a charity in the United States follows the suggested maximum rates published by the American Council on Gift Annuities. Those rates are built to accomplish three things at once: pay a competitive lifetime income, leave a charitable remainder of roughly half the gift on a present-value basis, and keep the program solvent for everyone in it. In 2026 a 70-year-old would be quoted the suggested 6.3% rate – $6,300 a year on a $100,000 gift – while an 85-year-old would be quoted 9.1%.

Three features separate gift annuities from commercial annuities and from charitable remainder trusts. The contract is irrevocable, so you cannot ask for the principal back. The payout is fixed, so inflation erodes it over time. And the gift annuity is regulated under state insurance law, which is why only charities with adequate reserves and a stated minimum age (usually 60 or 65) offer them.

How This Gift Annuity Calculator Works

The calculator prices a single-life immediate gift annuity at the 2026 suggested rates and returns six numbers: your annual and monthly income, the estimated income-tax deduction, the tax-free slice of every payment, the total you are projected to receive over your life expectancy, the reserve your charity is projected to keep, and the cost of replacing the gift for your heirs with term life insurance.

• Your age sets the payout rate, straight from the ACGA suggested schedule. Older annuitants get a higher rate because the payments are expected to run for fewer years.
• Gift amount and asset type determine the income, the deduction and whether capital gains tax enters the picture. Appreciated stock lets you avoid the capital gain entirely by gifting it instead of selling it.
• Marginal bracket and capital gains rate convert the deduction into real tax savings and price the gain you skip by giving stock.
• Adjusted gross income applies the IRS ceilings – 60% of AGI for cash gifts, 30% for appreciated property – and any excess carries forward up to five years.
• Section 7520 rate is the monthly discount rate the IRS requires for valuing the annuity you receive. The October 2026 rate is 5.6%.
• Assumed portfolio return drives the projection of the reserve the charity keeps. It is an illustration, not a promise.

The model uses the SSA 2023 period life table for survival probabilities and applies them to the payment stream to estimate the present value of the annuity you receive. Your deduction is the gift minus that present value. Charities compute the binding number with IRS Publication 1457 actuarial tables, so treat the figure here as a well-grounded estimate rather than a final number. Two-life joint and survivor contracts pay less per year than a single-life contract at the same age, because the payments continue until the second death.

Four Ways to Give, Side by Side

Gift annuities do not compete with other charitable tools – they compete for the same dollars with different trade-offs. The right choice usually comes down to how much income you need and how much control you want to keep.

Feature	Gift annuity (CGA)	Charitable remainder unitrust	Outright gift	Charity named on your life insurance
Income you receive	Fixed for life at the suggested rate	Percentage of a revalued trust, varies yearly	None	None – the policy pays at death
Typical deduction	30% to 65% of the gift	Usually higher; must exceed 10% of the gift	Full value, subject to AGI ceilings	None during life; estate-tax deduction at death
Who administers it	The charity, under state insurance rules	A trustee you or the charity appoints	Nobody	Nobody
Capital gains on appreciated assets	Avoided at funding; part of each payment is taxed as gain	Avoided inside the trust entirely	Avoided, since the charity is tax-exempt	Not applicable
Cost and complexity to set up	Low – one contract	High – legal drafting plus annual filings	None	Low – a beneficiary form or an assignment
Minimum size that makes sense	About $10,000 to $25,000	$100,000 to $250,000	Any amount	The face amount of a policy you already own
Can you change your mind	No – irrevocable	No – but the payout rate is flexible	No	Yes, until death

What the 2026 Suggested Rates Pay

The table below shows what the current suggested single-life rates pay on a $100,000 gift, with the estimated deduction at today’s 5.6% Section 7520 rate. Notice how the deduction grows with age even though the payout rate also grows: older annuitants receive fewer projected payments, so a larger share of the gift is left for charity and is therefore deductible.

Annuitant age	Suggested rate	Income on $100,000	Monthly	Tax-free portion	Estimated deduction	Deduction as % of gift
60	5.2%	$5,200	$433	49.8%	$35,966	36.0%
65	5.7%	$5,700	$475	54.0%	$36,425	36.4%
70	6.3%	$6,300	$525	58.4%	$38,291	38.3%
75	7.0%	$7,000	$583	63.0%	$42,261	42.3%
80	8.1%	$8,100	$675	67.3%	$46,506	46.5%
85	9.1%	$9,100	$758	70.8%	$54,774	54.8%
90	10.1%	$10,100	$842	72.6%	$64,805	64.8%

Two-life contracts are priced lower because two lives typically run longer than one. A 70-year-old couple sharing a joint and survivor annuity receives a smaller percentage than a single 70-year-old, and the same trade-off applies to a deferred gift annuity that starts paying at 80 rather than immediately.

How the Charitable Deduction Is Calculated

The IRS does not let you deduct the whole gift, because you are buying something with it: a lifetime income stream. The deductible amount is the gift minus the present value of the payments you are expected to receive. The present value is computed with the Section 7520 rate for the month of the gift, which the IRS resets monthly – it is 5.6% for October 2026 under Rev. Rul. 2026-19.

Section 7520 rate	Present value of your annuity	Estimated deduction on a $100,000 gift	Deduction as % of gift
4.0%	$70,257	$29,743	29.7%
5.0%	$64,704	$35,296	35.3%
5.6%	$61,709	$38,291	38.3%
6.0%	$59,838	$40,162	40.2%
6.5%	$57,629	$42,371	42.4%

Three rules decide whether the deduction survives contact with the tax return. First, the projected charitable remainder must exceed 10% of the gift or the arrangement is not a qualifying gift annuity and nothing is deductible. Second, you must itemize on Schedule A; the standard deduction for 2026 is well above the first-year deduction for a modest gift, so a $10,000 gift annuity rarely produces any actual tax benefit. Third, cash gifts are deductible up to 60% of your adjusted gross income and appreciated property up to 30%, with unused amounts carried forward for as many as five years.

How Gift Annuity Payments Are Taxed

Every payment is split into a tax-free part and a taxable part by the exclusion ratio – the present value of the annuity divided by the total payments you are expected to receive. On the default $100,000 example that ratio is 58.4% , so $3,681 of each $6,300 payment escapes income tax and the remainder is taxed as ordinary income. Once you have received payments for your full life expectancy, the exclusion is used up and the entire payment becomes taxable.

• Cash gifts produce the cleanest split: the taxable portion is ordinary income and the rest is excluded.
• Appreciated stock keeps the gain from being taxed at the moment of the gift, but the capital gain does not disappear – part of each payment is taxed as capital gain rather than ordinary income until the gain is fully reported.
• IRAs and other retirement accounts cannot be gifted during life without triggering income tax; a qualified charitable distribution or a beneficiary designation is usually the better path, but a gift annuity funded with a QCD from age 70½ onward is now permitted within the annual limit.
• Payments at death stop. A gift annuity pays for one life, and unpaid amounts are not payable to your estate.

Report the transaction on Form 1040 Schedule A for the deduction and on the annuity lines of your return for the payments. The charity issues a statement each January showing the exclusion ratio it computed, and it is that statement – not this calculator – that you use on your return.

Gift Annuity vs. Charitable Remainder Trust

Both tools convert an appreciated asset into lifetime income and a charitable gift. The difference is who carries the administration and how flexible the income is. Over your projected life expectancy in the default example, the unitrust leaves roughly $112,590 to charity against $91,536 for the gift annuity – but the unitrust pays you a variable amount that can fall as well as rise.

Choose the gift annuity when:

• The gift is under $250,000 and you want the charity to handle everything.
• You want a fixed, predictable payment you can budget against.
• You prefer not to pay for trust documents, annual valuations and a trustee.
• You want the simplest possible paperwork at tax time.

Choose the unitrust when:

• The asset is large enough that professional administration is worth the cost.
• You want the income to grow with the portfolio instead of shrinking with inflation.
• You want to name multiple income beneficiaries or change the payout structure later.
• You want the remainder to keep compounding inside a tax-exempt trust for the charity.

Giving Life Insurance Instead of Cash

Life insurance is the cheapest way to make a large charitable gift, because the charity receives the death benefit while you part with premiums rather than principal. There are two versions. Naming a charity as beneficiary on a policy you already own costs nothing today and creates no income-tax deduction during your life, but the proceeds go to the charity free of income tax and outside your probate estate. Assigning the policy to the charity during your life can generate an income-tax deduction equal to the lesser of your basis or the policy’s value – roughly the interpolated terminal reserve plus any unearned premium – plus a deduction for every premium you keep paying after the transfer.

Because a gift annuity consumes principal that your heirs would otherwise inherit, many donors pair the gift with new term coverage sized to the amount given away. The table shows what that replacement coverage costs at production rates for a 20-year term policy in the good health class:

Age	Male, $250,000	Female, $250,000	Male, $500,000	Female, $500,000
50	$168	$130	$335	$260
55	$252	$190	$505	$380
60	$388	$290	$775	$580
65	$610	$448	$1,220	$895
70	$972	$720	$1,945	$1,440
75	$972	$720	$1,945	$1,440

The sequence most donors follow:

1. Decide how much of the gift your heirs can afford to lose, then subtract it from your estate plan.
2. Price replacement term coverage equal to that amount and make your children or a trust the beneficiary.
3. Fund the gift annuity with cash or appreciated securities and take the deduction in the highest-bracket year you can.
4. Assign an existing life insurance policy to the same charity if you want to add a larger gift without more cash.
5. Review the arrangement whenever a death, a divorce or a change in the tax law alters the plan.

Who Should Consider a Gift Annuity

It fits when:

• You are 65 or older, itemize deductions, and already give to the charity every year.
• You want more guaranteed income than a CD or a bond ladder pays, and you are comfortable spending principal.
• You hold appreciated stock you would rather not sell because of the capital gains tax.
• The charity is a long-established organization whose reserve is regulated and audited.

It does not fit when:

• You may need the principal back – the gift is irrevocable.
• You take the standard deduction and expect to for years to come.
• You want inflation protection; a fixed payment buys less every decade.
• Your heirs depend on that asset and you have no way to replace it.

Frequently Asked Questions

Are charitable gift annuity payments taxable?

Partly. Each payment is divided by the exclusion ratio into a tax-free portion that returns your investment in the contract and a taxable portion. On the default example, 58.4% of every payment is excluded from income and the rest is taxed – as ordinary income for a cash gift, and partly as capital gain when the annuity was funded with appreciated property. Once you have received payments for your full life expectancy the exclusion is exhausted and the payments become fully taxable.

How much can I deduct for a gift annuity in 2026?

The deduction equals the gift minus the present value of the payments you are expected to receive. At the current 5.6% Section 7520 rate that works out to about 36% of a $100,000 gift for a 65-year-old and about 55% for an 85-year-old. Cash gifts are deductible up to 60% of adjusted gross income and appreciated property up to 30%, with the excess carried forward for up to five years.

Can I fund a gift annuity with appreciated stock?

Yes, and it is often the most tax-efficient way to do it. The charity is tax-exempt, so the built-in capital gain is never taxed when it sells the shares. You avoid the gain you would have recognized on a sale, and the portion of each annuity payment that represents the gain is reported as capital gain rather than ordinary income. Note that a stock gift is deductible at fair market value only up to 30% of adjusted gross income, versus 60% for cash.

Do I have to itemize to claim the deduction?

Yes. A charitable deduction is only worth something if your total itemized deductions exceed the standard deduction. For 2026 the standard deduction is roughly $16,100 for a single filer and $32,200 for a married couple filing jointly, so a gift annuity generating a $5,000 deduction produces no tax benefit on its own. Larger gifts, or gifts bunched into one year alongside a mortgage interest deduction, are where the deduction earns its keep.

What happens if I die shortly after funding the annuity?

The charity keeps the remainder of the reserve, and that is the point of the structure – a gift annuity is a mortality-pooled gift, not a deposit. Payments stop at death and nothing is refunded to your estate. Some charities will continue payments to a surviving spouse under a two-life contract; none of them return principal to heirs.

Is a gift annuity or a charitable remainder trust better?

Gift annuities win on simplicity and suit gifts under roughly $250,000, where trust administration would consume too much of the value. Charitable remainder unitrusts win on flexibility: the payout is a percentage of a revalued portfolio, so the income can grow with inflation, the remainder can keep compounding tax-free, and the donor keeps more control over investments and beneficiaries. Above $500,000, or when inflation protection matters, the trust usually wins.

Can I name a charity as the beneficiary of my life insurance instead?

Yes, and it is the least expensive way to leave a large gift. The death benefit passes to the charity free of income tax and outside probate, and your estate can take an estate-tax deduction for the amount if the estate is taxable. The trade-off is that you get no income-tax deduction during your life, and you cannot keep the income – a beneficiary designation funds a gift, while a gift annuity funds both a gift and a paycheck. Many donors do both: a gift annuity for income now, and a policy beneficiary designation for a larger gift later.

What happens to my payments if the charity closes?

Gift annuities are regulated as insurance business in most states. Charities must hold reserves, file annual reports with the state insurance department, and many belong to the ACGA, which requires a reserve fund and a board-approved investment policy. If a charity were to fail, the reserve backing in-force contracts is typically transferred to another charity or insurer so payments continue, but the protection is a state regulatory framework rather than a federal guarantee – which is why the charity’s size and reserve history matter as much as the payout rate.

Related Resources

Learn more about the pieces that sit around a gift annuity:

• Life insurance for charitable giving: the complete guide
• Gift now vs. inherit calculator: transfer timing and the step-up in basis
• Inheritance tax calculator: what heirs owe in the five states that still tax inheritances
• Life expectancy calculator: how long the payments are projected to run
• QLAC calculator: guaranteed income that starts at 80
• Life insurance IQ quiz: 15 questions most people get wrong

Official sources used on this page:

• American Council on Gift Annuities – current suggested rates
• IRS Publication 526 – charitable contributions
• IRS Section 7520 interest rates
• NAIC consumer resources
• SSA period life table

If the gift consumes coverage your family was relying on, price a replacement term policy before you sign the annuity contract.