diff --git a/Project.toml b/Project.toml
index 8751572..5e8781e 100644
--- a/Project.toml
+++ b/Project.toml
@@ -1,7 +1,7 @@
 name = "TensorAlgebra"
 uuid = "68bd88dc-f39d-4e12-b2ca-f046b68fcc6a"
 authors = ["ITensor developers <support@itensor.org> and contributors"]
-version = "0.3.4"
+version = "0.3.5"
 
 [deps]
 ArrayLayouts = "4c555306-a7a7-4459-81d9-ec55ddd5c99a"
diff --git a/src/MatrixAlgebra.jl b/src/MatrixAlgebra.jl
index d99d5e1..0731a4b 100644
--- a/src/MatrixAlgebra.jl
+++ b/src/MatrixAlgebra.jl
@@ -20,7 +20,7 @@ export eigen,
   svdvals!,
   truncerr
 
-using LinearAlgebra: LinearAlgebra
+using LinearAlgebra: LinearAlgebra, norm
 using MatrixAlgebraKit
 
 for (f, f_full, f_compact) in (
@@ -173,4 +173,56 @@ function MatrixAlgebraKit.findtruncated(values::AbstractVector, strategy::Trunca
   return Base.OneTo(rank)
 end
 
+struct TruncationDegenerate{Strategy<:TruncationStrategy,T<:Real} <: TruncationStrategy
+  strategy::Strategy
+  atol::T
+  rtol::T
+end
+
+"""
+    truncdegen(trunc::TruncationStrategy; atol::Real=0, rtol::Real=0)
+
+Modify a truncation strategy so that if the truncation falls within
+a degenerate subspace, the entire subspace gets truncated as well.
+A value `val` is considered degenerate if
+`norm(val - truncval) ≤ max(atol, rtol * norm(truncval))`
+where `truncval` is the largest value truncated by the original
+truncation strategy `trunc`.
+
+For now, this truncation strategy assumes the spectrum being truncated
+has already been reverse sorted and the strategy being wrapped
+outputs a contiguous subset of values including the largest one. It
+also only truncates for now, so may not respect if a minimum dimension
+was requested in the strategy being wrapped. These restrictions may
+be lifted in the future or provided through a different truncation strategy.
+"""
+function truncdegen(strategy::TruncationStrategy; atol::Real=0, rtol::Real=0)
+  return TruncationDegenerate(strategy, promote(atol, rtol)...)
+end
+
+using MatrixAlgebraKit: findtruncated
+
+function MatrixAlgebraKit.findtruncated(
+  values::AbstractVector, strategy::TruncationDegenerate
+)
+  Base.require_one_based_indexing(values)
+  issorted(values; rev=true) || throw(ArgumentError("Values must be reverse sorted."))
+  indices_collection = findtruncated(values, strategy.strategy)
+  indices = Base.OneTo(maximum(indices_collection))
+  indices_collection == indices ||
+    throw(ArgumentError("Truncation must be a contiguous range."))
+  if length(indices_collection) == length(values)
+    # No truncation occurred.
+    return indices
+  end
+  # The largest truncated value.
+  truncval = values[last(indices) + 1]
+  # Tolerance of determining if a value is degenerate.
+  atol = max(strategy.atol, strategy.rtol * abs(truncval))
+  for rank in reverse(indices)
+    ≈(values[rank], truncval; atol, rtol=0) || return Base.OneTo(rank)
+  end
+  return Base.OneTo(0)
+end
+
 end
diff --git a/test/test_matrixalgebra.jl b/test/test_matrixalgebra.jl
index 012ea10..d95e51b 100644
--- a/test/test_matrixalgebra.jl
+++ b/test/test_matrixalgebra.jl
@@ -1,7 +1,7 @@
 using LinearAlgebra: Diagonal, I, diag, isposdef, norm
-using MatrixAlgebraKit: qr_compact, svd_trunc
+using MatrixAlgebraKit: qr_compact, svd_trunc, truncrank
 using StableRNGs: StableRNG
-using TensorAlgebra.MatrixAlgebra: MatrixAlgebra, truncerr
+using TensorAlgebra.MatrixAlgebra: MatrixAlgebra, truncdegen, truncerr
 using Test: @test, @testset
 
 elts = (Float32, Float64, ComplexF32, ComplexF64)
@@ -304,4 +304,140 @@ elts = (Float32, Float64, ComplexF32, ComplexF64)
     @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.001])
     @test ũ * s̃ * ṽ ≈ a atol = 0.002 rtol = 0.002
   end
+  @testset "Truncate degenerate" begin
+    s = Diagonal(real(elt)[2.0, 0.32, 0.3, 0.29, 0.01, 0.01])
+    n = length(diag(s))
+    rng = StableRNG(123)
+    u, _ = qr_compact(randn(rng, elt, n, n); positive=true)
+    v, _ = qr_compact(randn(rng, elt, n, n); positive=true)
+    a = u * s * v
+
+    ũ, s̃, ṽ = svd_trunc(a; trunc=truncdegen(truncrank(n); atol=0.1))
+    @test size(ũ) == (n, n)
+    @test size(s̃) == (n, n)
+    @test size(ṽ) == (n, n)
+    @test ũ * s̃ * ṽ ≈ a
+
+    for kwargs in (
+      (; atol=eps(real(elt))),
+      (; rtol=(√eps(real(elt)))),
+      (; atol=eps(real(elt)), rtol=(√eps(real(elt)))),
+    )
+      ũ, s̃, ṽ = svd_trunc(a; trunc=truncdegen(truncrank(5); kwargs...))
+      @test size(ũ) == (n, 4)
+      @test size(s̃) == (4, 4)
+      @test size(ṽ) == (4, n)
+      @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.01, 0.01])
+    end
+
+    for kwargs in (
+      (; atol=eps(real(elt))),
+      (; rtol=eps(real(elt))),
+      (; atol=eps(real(elt)), rtol=eps(real(elt))),
+    )
+      ũ, s̃, ṽ = svd_trunc(a; trunc=truncdegen(truncrank(4); kwargs...))
+      @test size(ũ) == (n, 4)
+      @test size(s̃) == (4, 4)
+      @test size(ṽ) == (4, n)
+      @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.01, 0.01])
+    end
+
+    trunc = truncdegen(truncrank(3); atol=0.01 - √eps(real(elt)))
+    ũ, s̃, ṽ = svd_trunc(a; trunc)
+    @test size(ũ) == (n, 3)
+    @test size(s̃) == (3, 3)
+    @test size(ṽ) == (3, n)
+    @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.29, 0.01, 0.01])
+
+    trunc = truncdegen(truncrank(3); rtol=0.01/0.3 - √eps(real(elt)))
+    ũ, s̃, ṽ = svd_trunc(a; trunc)
+    @test size(ũ) == (n, 3)
+    @test size(s̃) == (3, 3)
+    @test size(ṽ) == (3, n)
+    @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.29, 0.01, 0.01])
+
+    trunc = truncdegen(truncrank(3); atol=0.01 + √eps(real(elt)))
+    ũ, s̃, ṽ = svd_trunc(a; trunc)
+    @test size(ũ) == (n, 2)
+    @test size(s̃) == (2, 2)
+    @test size(ṽ) == (2, n)
+    @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.3, 0.29, 0.01, 0.01])
+
+    trunc = truncdegen(truncrank(3); rtol=0.01/0.29 + √eps(real(elt)))
+    ũ, s̃, ṽ = svd_trunc(a; trunc)
+    @test size(ũ) == (n, 2)
+    @test size(s̃) == (2, 2)
+    @test size(ṽ) == (2, n)
+    @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.3, 0.29, 0.01, 0.01])
+
+    trunc = truncdegen(truncrank(3); atol=0.02 - √eps(real(elt)))
+    ũ, s̃, ṽ = svd_trunc(a; trunc)
+    @test size(ũ) == (n, 2)
+    @test size(s̃) == (2, 2)
+    @test size(ṽ) == (2, n)
+    @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.3, 0.29, 0.01, 0.01])
+
+    trunc = truncdegen(truncrank(3); rtol=0.02/0.29 - √eps(real(elt)))
+    ũ, s̃, ṽ = svd_trunc(a; trunc)
+    @test size(ũ) == (n, 2)
+    @test size(s̃) == (2, 2)
+    @test size(ṽ) == (2, n)
+    @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.3, 0.29, 0.01, 0.01])
+
+    trunc = truncdegen(truncrank(3); atol=0.03 + √eps(real(elt)))
+    ũ, s̃, ṽ = svd_trunc(a; trunc)
+    @test size(ũ) == (n, 1)
+    @test size(s̃) == (1, 1)
+    @test size(ṽ) == (1, n)
+    @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.32, 0.3, 0.29, 0.01, 0.01])
+
+    trunc = truncdegen(truncrank(3); rtol=0.03/0.29 + √eps(real(elt)))
+    ũ, s̃, ṽ = svd_trunc(a; trunc)
+    @test size(ũ) == (n, 1)
+    @test size(s̃) == (1, 1)
+    @test size(ṽ) == (1, n)
+    @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.32, 0.3, 0.29, 0.01, 0.01])
+
+    trunc = truncdegen(truncrank(3); atol=0.01, rtol=0.03/0.29 + √eps(real(elt)))
+    ũ, s̃, ṽ = svd_trunc(a; trunc)
+    @test size(ũ) == (n, 1)
+    @test size(s̃) == (1, 1)
+    @test size(ṽ) == (1, n)
+    @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.32, 0.3, 0.29, 0.01, 0.01])
+
+    trunc = truncdegen(truncrank(3); atol=0.03 + √eps(real(elt)), rtol=0.01/0.29)
+    ũ, s̃, ṽ = svd_trunc(a; trunc)
+    @test size(ũ) == (n, 1)
+    @test size(s̃) == (1, 1)
+    @test size(ṽ) == (1, n)
+    @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.32, 0.3, 0.29, 0.01, 0.01])
+
+    trunc = truncdegen(truncrank(3); atol=(2 - 0.29) - √(eps(real(elt))))
+    ũ, s̃, ṽ = svd_trunc(a; trunc)
+    @test size(ũ) == (n, 1)
+    @test size(s̃) == (1, 1)
+    @test size(ṽ) == (1, n)
+    @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.32, 0.3, 0.29, 0.01, 0.01])
+
+    trunc = truncdegen(truncrank(3); rtol=(2 - 0.29)/0.29 - √(eps(real(elt))))
+    ũ, s̃, ṽ = svd_trunc(a; trunc)
+    @test size(ũ) == (n, 1)
+    @test size(s̃) == (1, 1)
+    @test size(ṽ) == (1, n)
+    @test norm(ũ * s̃ * ṽ - a) ≈ norm([0.32, 0.3, 0.29, 0.01, 0.01])
+
+    trunc = truncdegen(truncrank(3); atol=(2 - 0.29) + √(eps(real(elt))))
+    ũ, s̃, ṽ = svd_trunc(a; trunc)
+    @test size(ũ) == (n, 0)
+    @test size(s̃) == (0, 0)
+    @test size(ṽ) == (0, n)
+    @test norm(ũ * s̃ * ṽ) ≈ 0
+
+    trunc = truncdegen(truncrank(3); rtol=(2 - 0.29)/0.29 + √(eps(real(elt))))
+    ũ, s̃, ṽ = svd_trunc(a; trunc)
+    @test size(ũ) == (n, 0)
+    @test size(s̃) == (0, 0)
+    @test size(ṽ) == (0, n)
+    @test norm(ũ * s̃ * ṽ) ≈ 0
+  end
 end