IRS Releases 2026 Tax Adjustments, Changes Under ‘Big, Beautiful Bill’

The IRS on Thursday released its annual inflation adjustments for various tax provisions, as well as guidance regarding changes made under the One Big Beautiful Bill Act. 

The standard deduction will rise to $16,100 for single taxpayers and $32,200 for married couples filing jointly in the 2026 tax year. The 2025 standard tax deduction was also raised to $15,750 for single filers and $31,500 for couples filing jointly.

Marginal tax brackets were also adjusted for inflation – with the top tax rate remaining at 37% for single taxpayers making $640,600, and joint filers making over $768,000. Other tax brackets are as follows:

• 35% for incomes over $256,225 for individuals and $512,450 for married filers;

• 32% for incomes over $201,775 for individuals and $403,550 for married filers;

• 24% for incomes over $105,700 for individuals and $211,400 for married filers;

• 22% for incomes over $50,400 for individuals and $100,800 for married filers;

• 12% for incomes over $12,400 for individuals and $24,800 for married filers;

• 10% for incomes of $12,400 or less for individuals or $24,800 for married filers.

OBBBA changes include the estate tax exclusion, which will be set at $15 million for the estates of decedents who die in 2026 – an increase from the current $13.99 million that applies this year.

Adoption credits will increase from $17,820 in 2025 to $17,670 in 2026, while the amount that’s refundable will be $5,120. 

The exemption for the Alternative Minimum Tax will be set to $90,100 for individuals – but will begin to phase out at $500,000, and $140,200 for joint filers which will phase out starting at $1million. 

OBBBA also increased the max amount of the employer-provided childcare tax credit from $150,000 to $500,000 (or $600,000 if the employer is an eligible small business), Fox News reports.

Meanwhile, the earned income tax credit will rise to a maximum amount of $8,231 for qualifying taxpayers with three or more children, an increase of $8,046 in 2025. 

More via Fox News: 

The limitation for voluntary employee salary reductions for contributions to health flexible spending arrangements will increase to $3,400 in tax year 2026, up $100 from last year. Cafeteria plans that allow unused amounts to carryover would have the maximum carryover at $680, up $20 from 2025.

Taxpayers who have self-only coverage in a medical savings account would have to have a deductible of at least $2,900 in tax year 2026, up $50 from this year, but not more than $4,400, which is an increase of $100 from this year. The maximum out-of-pocket expense amount for self-only coverage will increase $150 to $5,850 in 2026.

For family coverage with medical savings accounts, the annual deductible will be between $5,850 to $8,750, while the out-of-pocket expense limit will be $10,700 in tax year 2026.

The monthly limitation for the qualified transportation fringe benefit will rise $15 to $340 in tax year 2026.

The annual exclusion for gifts will be unchanged for tax year 2026 at $19,000.

Some tax provisions that in the past were indexed for inflation are no longer adjusted. Those include personal exemptions, itemized deductions, and the income measurement used to phase out the lifetime learning credit.