The Internal Revenue Service (IRS) has officially released the new federal income tax brackets for 2026, along with higher standard deductions and other inflation adjustments. These updates apply to tax returns filed in 2027 and reflect the latest changes under the One Big Beautiful Bill Act (OBBBA).
New 2026 Federal Income Tax Brackets
For the 2026 tax year, the IRS adjusted all income thresholds to keep pace with inflation. The top federal tax rate remains 37%, applying to individuals earning more than $640,600 and married couples filing jointly with income above $768,700.
Here’s a breakdown of the 2026 tax brackets:
- 10% — up to $12,400 (single) / $24,800 (married filing jointly)
- 12% — over $12,400 to $50,400 (single) / $24,800 to $100,800 (married)
- 22% — over $50,400 to $105,700 (single) / $100,800 to $211,400 (married)
- 24% — over $105,700 to $201,775 (single) / $211,400 to $403,550 (married)
- 32% — over $201,775 to $256,225 (single) / $403,550 to $512,450 (married)
- 35% — over $256,225 to $640,600 (single) / $512,450 to $768,700 (married)
- 37% — over $640,600 (single) / $768,700 (married filing jointly)
The IRS adjusts these figures every year to prevent what’s known as bracket creep — when inflation pushes taxpayers into higher brackets even without real income growth.
Calculate Your 2026 COLA Increase →Standard Deduction Increases for 2026
The standard deduction— claimed by most U.S. taxpayers — will also rise for 2026:
- $32,200 for married couples filing jointly (up from $31,500 in 2026)
- $16,100 for single filers (up from $15,750 in 2026)
- $24,150 for heads of household (up from $23,625 in 2026)
These modest increases build on the larger hikes introduced by the OBBBA, which permanently raised deductions starting in 2026.
Other Key IRS Tax Adjustments for 2026
Estate and Gift Tax
The estate tax exclusion will increase to $15 million for 2026, up from $13.99 million in 2026. The adoption credit also rises slightly to $17,670, with a refundable portion of $5,120.
Earned Income Tax Credit (EITC)
The EITC will increase to $8,231 for qualifying taxpayers with three or more children, compared with $8,046 in 2026.
Alternative Minimum Tax (AMT)
The AMT exemption is set at $90,100 for individuals and $140,200 for married couples, with phase-outs beginning at $500,000 and $1 million respectively.
Employer-Provided Childcare Credit
The maximum employer-provided childcare tax credit increases from $150,000 to $500,000, or up to $600,000 for eligible small businesses.
Flexible Spending Accounts
The annual limit for health flexible spending arrangements (FSAs) rises to $3,400 in 2026. The carryover limit for unused funds increases to $680.
Senior Deduction and Tip Tax Relief
Starting in 2026, Americans aged 65 and older qualify for a new $6,000 federal tax deduction, or $12,000 for couples. The deduction begins to phase out at $75,000 in income for singles and $150,000 for joint filers.
In addition, tips will no longer be subject to federal income tax beginning in 2026. This applies to both cash and electronic tips. However, workers must still report tip income for Social Security and Medicare contributions.
Why These IRS 2026 Tax Updates Matter
The IRS 2026 federal income tax brackets and standard deduction increases are designed to offset inflation and preserve purchasing power. With the One Big Beautiful Bill Act now making many 2017 tax provisions permanent, most Americans will see slightly lower tax burdens and small boosts to take-home pay in 2026.
