2026 Tax Brackets
On a yearly basis, the Internal Revenue Service (IRS) adjusts more than 60 tax provisions for inflation to prevent what is called “bracket creep.” Bracket creep occurs when inflation, rather than real increases in income, pushes people into higher income tax brackets or reduces the value they receive from credits and deductions.
The IRS previously used the Consumer Price Index (CPI) as a measure of inflation prior to 2018. However, with the Tax Cuts and Jobs Act of 2017 (TCJA), the IRS now uses the Chained Consumer Price Index (C-CPI) to adjust income thresholds, deduction amounts, and credit values accordingly.
The One Big Beautiful Bill Act (OBBBA), passed in July 2025, made permanent most of the TCJA individual tax provisions scheduled for expiration at the end of 2025 and made other changes to individual taxes that will impact tax parameters for the 2026 tax year.
The new inflation adjustments are for tax year 2026, for which taxpayers will file tax returns in early 2027. On average, tax parameters that are adjusted for inflation will increase by about 2.7 percent.
2026 Federal Income Tax Brackets and Rates
In 2026, the income limits for all tax brackets and all filers will be adjusted for inflation and can be found in Table 1. The federal income tax has seven tax rates in 2026: 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent, and 37 percent. The top marginal income tax rate of 37 percent will hit taxpayers with taxable income above $640,600 for single filers and above $768,600 for married couples filing jointly.
The OBBBA made permanent the TCJA ordinary income tax structure and made an additional inflation adjustment for income subject to the bottom two brackets (10 percent and 12 percent), providing a 4 percent inflation adjustment for the bottom two brackets and a 2.3 percent increase for the higher brackets.
Table 1. 2026 Federal Income Tax Brackets and Rates for Single Filers, Married Couples Filing Jointly, and Heads of Households
| Tax RateFor Single FilersFor Married Individuals Filing Joint ReturnsFor Heads of Households | |||
|---|---|---|---|
| 10% | $0 to $12,400 | $0 to $24,800 | $0 to $17,700 |
| 12% | $12,401 to $50,400 | $24,801 to $100,800 | $17,701 to $67,450 |
| 22% | $50,401 to $105,700 | $100,801 to $211,400 | $67,451 to $105,700 |
| 24% | $105,701 to $201,775 | $211,401 to $403,550 | $105,701 to $201,775 |
| 32% | $201,776 to $256,225 | $403,551 to $512,450 | $201,776 to $256,200 |
| 35% | $256,226 to $640,600 | $512,451 to $768,700 | $256,201 to $640,600 |
| 37% | $640,601 or more | $768,701 or more | $640,601 or more |
2026 Standard Deduction and Personal Exemption
The standard deduction will increase by $350 for single filers and by $700 for joint filers compared to the 2025 tax year (Table 2). The OBBBA boosted the standard deduction in 2025 by $750 for single filers and $1,500 for joint filers compared to prior law on top of the 2026 inflation adjustment.
Seniors over age 65 may claim an additional standard deduction of $2,050 for single filers and $1,650 for joint filers. On top of this, taxpayers aged 65 and older both itemizing and claiming the standard deduction may claim a new $6,000 deduction per qualifying taxpayer, phasing out at a six percent rate for those earning over $75,000 (single) and $150,000 (joint) as part of the separate senior deduction under the OBBBA.
The personal exemption for 2025 remains at $0 (eliminating the personal exemption was part of the TCJA, and the $0 amount was made permanent as part of the OBBBA).
Table 2. 2026 Standard Deduction
| Filing StatusDeduction Amount | |
|---|---|
| Single | $16,100 |
| Married Filing Jointly | $32,200 |
| Head of Household | $24,150 |
Source: Internal Revenue Service, “Revenue Procedure 2025-32.
2026 Alternative Minimum Tax
The alternative minimum tax (AMT) was created in the 1960s to prevent high-income taxpayers from avoiding the individual income tax. This parallel income tax system requires high-income taxpayers to calculate their tax bill twice: once under the ordinary income tax system and again under the AMT. The taxpayer then needs to pay the higher of the two.
The AMT uses an alternative definition of taxable income called alternative minimum taxable income (AMTI). To prevent low- and middle-income taxpayers from being subject to the AMT, taxpayers are allowed to exempt a significant amount of their income from AMTI. However, the exemption phases out for high-income taxpayers. The AMT is levied at two rates: 26 percent and 28 percent.
The AMT exemption amount for 2026 is $90,100 for singles and $140,200 for married couples filing jointly (Table 3), a continuation of the TCJA design adjusted for inflation after the structure was made permanent in the OBBBA.
Table 3. 2026 Alternative Minimum Tax (AMT) Exemptions
| Filing Status | Exemption Amount |
|---|---|
| Unmarried Individuals | $90,100 |
| Married Filing Jointly | $140,200 |
Source: Internal Revenue Service, “Revenue Procedure 2025-32.
In 2026, the 28 percent AMT rate applies to excess AMTI of $244,500 for all taxpayers ($122,250 for married couples filing separate returns).
AMT exemptions phase out at 50 cents per dollar earned once AMTI reaches $500,000 for single filers and $1,000,000 for married taxpayers filing jointly (Table 4). The OBBBA’s changes to the AMT return the phaseout thresholds to 2018 levels and accelerate the phaseout rate from 25 percent previously.
In 2025, the exemption phaseout thresholds began at $625,350 for single filers and $1,252,700 for married taxpayers filing jointly, making the 2026 changes a slight tax increase for some taxpayers.
Table 4. 2026 Alternative Minimum Tax (AMT) Exemption Phaseout Thresholds
| Filing Status | Threshold |
|---|---|
| Unmarried Individuals | $500,000 |
| Married Filing Jointly | $1,000,000 |
Source: Internal Revenue Service, “Revenue Procedure 2025-32.”
2026 Earned Income Tax Credit
The maximum earned income tax credit (EITC) in 2026 for single and joint filers is $664 if the filer has no children (Table 5). The maximum credit is $4,427 for one child, $7,316 for two children, and $8,231 for three or more children.
Table 5. 2026 Earned Income Tax Credit (EITC) Parameters
| Filing Status | No Children | One Child | Two Children | Three or More Children | |
|---|---|---|---|---|---|
| Single or Head of Household | Income at Max Credit | $8,680 | $13,020 | $18,290 | $18,290 |
| Maximum Credit | $664 | $4,427 | $7,316 | $8,231 | |
| Phaseout Begins | $10,860 | $23,890 | $23,890 | $23,890 | |
| Phaseout Ends (Credit Equals Zero) | $19,540 | $51,593 | $58,629 | $62,974 | |
| Married Filing Jointly | Income at Max Credit | $8,680 | $13,020 | $18,290 | $18,290 |
| Maximum Credit | $664 | $4,427 | $7,316 | $8,231 | |
| Phaseout Begins | $18,140 | $31,160 | $31,160 | $31,160 | |
| Phaseout Ends (Credit Equals Zero) | $26,820 | $58,863 | $65,899 | $70,224 |
Source: Internal Revenue Service, “Revenue Procedure 2025-32.”
2026 Child Tax Credit
The maximum child tax credit (CTC) in both 2025 and 2026 is $2,200 per qualifying child and will be adjusted for inflation moving forward. The OBBBA made the underlying expanded CTC from the TCJA permanent, increased the maximum CTC up from $2,000, and introduced the inflation adjustment.
The refundable portion of the child tax credit is adjusted for inflation and will remain at $1,700 for 2026.
2026 Capital Gains Tax Rates and Brackets (Long-Term Capital Gains)
Long-term capital gains face different brackets and rates than ordinary income (Table 6).
Table 6. 2026 Capital Gains Tax Brackets
| For Unmarried Individuals, Taxable Income OverFor Married Individuals Filing Joint Returns, Taxable Income OverFor Heads of Households, Taxable Income Over | |||
|---|---|---|---|
| 0% | $0 | $0 | $0 |
| 15% | $49,450 | $98,900 | $66,200 |
| 20% | $545,500 | $613,700 | $579,600 |
Source: Internal Revenue Service, “Revenue Procedure 2025-32.”
2026 Qualified Business Income Deduction (Sec. 199A)
The TCJA included a 20 percent deduction for pass-through businesses, and the OBBBA made this deduction permanent.
Limits on the deduction begin phasing in for taxpayers with income above $201,775 (or $403,500 for joint filers) in 2026 (Table 7). The OBBBA slowed the range of income the deduction limits phase in from $50,000 to $75,000 for single filers and from $100,000 to $150,000 for taxpayers married filing jointly.
Table 7. 2026 Qualified Business Income Deduction Thresholds
| Filing StatusThreshold AmountIncome Where Deduction Limits Completely Phase in | ||
|---|---|---|
| Unmarried Individuals | $201,775 | $276,775 |
| Married Filing Jointly | $403,500 | $553,500 |
Source: Internal Revenue Service, “Revenue Procedure 2025-32.”
2026 Annual Exclusion for Gifts
In 2026, the first $19,000 of gifts to any person is excluded from tax, remaining the same as in 2025. The exclusion is increased to $194,000 from $190,000 for gifts to spouses who are not citizens of the United States.
The OBBBA made the TCJA-era estate tax exemption permanent and raised it to $15 million per person beginning in 2026, adjusted for inflation moving forward.
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