2026 Tax Brackets and Federal Income Tax Rates

2025 Tax Brackets 2024 Tax Brackets 2023 Tax Brackets

On a yearly basis, the Internal Revenue Service (IRS) adjusts more than 60 tax provisions for inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spendin to prevent what is called “bracket creep.” Bracket creep occurs when inflation, rather than real increases in income, pushes people into higher income tax bracketsA tax bracket is the range of incomes taxed at given rates, which typically differ depending on filing status. In a progressive individual or corporate income tax system, rates rise as income increases. There are seven federal individual income tax brackets; the federal corporate income tax system is flat. 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 TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. 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

Source: Internal Revenue Service, “Revenue Procedure 2025-32.”

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2026 Standard DeductionThe standard deduction reduces a taxpayer’s taxable income by a set amount determined by the government. Taxpayers who take the standard deduction cannot also itemize their deductions; it serves as an alternative. 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

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 taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source. 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

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

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

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 TaxA capital gains tax is levied on the profit made from selling an asset and is often in addition to corporate income taxes, frequently resulting in double taxation. These taxes create a bias against saving, leading to a lower level of national income by encouraging present consumption over investment. 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

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

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 exemptionA tax exemption excludes certain income, revenue, or even taxpayers from tax altogether. For example, nonprofits that fulfill certain requirements are granted tax-exempt status by the Internal Revenue Service (IRS), preventing them from having to pay income tax. permanent and raised it to $15 million per person beginning in 2026, adjusted for inflation moving forward.

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