The Internal Revenue Service has revealed the updated tax brackets for the 2026 tax year, alongside modifications to the standard deduction and various credits, including the earned income tax credit and inheritance tax credit.
This update will come into effect for taxpayers when they file their 2027 returns.
What does the new tax structure look like?
For the tax year 2026, the rates are set as follows:
- 37% for single taxpayers earning over $640,600 ($768,700 for married couples filing jointly);
- 35% for incomes exceeding $256,225 ($512,450 for married couples filing jointly).
- 32% for incomes over $201,775 ($403,550 for married couples filing jointly).
- 24% for incomes above $105,700 ($211,400 for married couples filing jointly).
- 22% for incomes exceeding $50,400 ($100,800 for married couples filing jointly).
- 12% for incomes over $12,400 ($24,800 for married couples filing jointly).
These adjustments reflect a slight increase in thresholds across tax brackets, largely due to inflation.
Any changes to the standard deduction?
For tax year 2026, the standard deduction will be set at $32,200 for married couples filing jointly. Single taxpayers and those filing separately will see their deduction rise to $16,100, while heads of households will receive a deduction of $24,150.
This represents increases of $350, $700, and $525, respectively, depending on the filing status.
Are there updates to credits and regulations?
Additions to the tax schedule include the following notable changes:
- Alternative minimum tax exemption. In 2026, the exemption for unmarried individuals will be $90,100, phasing out at $500,000 (for married couples filing jointly, it will be $140,200, phasing out at $1,000,000).
- Inheritance tax deduction. The base deduction for estates of decedents who pass away in 2026 rises to $15 million from $13.99 million in 2025.
- Recruitment credits. For 2026, the deduction for adoptions can go up to $17,670 in qualified expenses, increased from $17,280 in 2025. The potential refundable deduction stands at $5,120 for this year.
- Employer-provided child care tax credits. The One Big Beautiful Bill Act enhances credits considerably, with the maximum employer-provided child care credit increasing from $150,000 to $500,000 (or $600,000 for qualifying small businesses).
- Earned Income Tax Credit. The maximum EITC for taxpayers with three or more eligible children will be $8,231 in 2026, up from $8,046 in 2025.
For further details or to review adjustments to more than 60 tax provisions, click here or visit the IRS website.
