WASHINGTON, D.C. — The Internal Revenue Service (IRS) on Thursday unveiled a series of significant adjustments to federal tax return parameters for both the 2025 and 2026 tax years. These changes result from both statutory updates under the new tax law enacted in July and the standard annual inflation adjustments.
Tax experts suggest that, generally speaking, the changes will offer taxpayers “modest relief” simply because the deductions and thresholds move upward. Inflation will take less of a bite,” Tom O’Saben, director of tax content at the National Association of Tax Professionals, reported to CNN.
Higher Standard Deduction Confirmed
The most widely used deduction is receiving a dual boost from the new tax law and inflation. A higher standard deduction means more income falls into the “zero bracket,” effectively shielding it from taxation.
The increases are broken down across the next two tax years:
| Filing Status | Tax Year 2025 (New Tax Law) | Tax Year 2026 (Inflation Adjusted) |
| Single Filers | $15,750 (Up from scheduled $15,000) | $16,100 |
| Married, Filing Jointly | $31,500 (Up from scheduled $30,000) | $32,200 |
| Heads of Households | $23,625 (Up from scheduled $22,500) | $24,150 |
The recently enacted tax legislation mandates the initial jump for 2025, while the subsequent rise for 2026 reflects the IRS’s annual inflation adjustment methodology.
2026 Income Tax Brackets Adjusted
The IRS also announced the new income ranges that will apply to the seven federal income tax rates for the 2026 tax year. These adjustments ensure that wage growth driven by inflation does not unfairly push taxpayers into higher tax brackets.
Taxpayers only pay the higher rate on the portion of income that falls within the new bracket. The 2026 brackets are as follows:
| Tax Rate | Single Filers (Income Over) | Married, Filing Jointly (Income Over) |
| 10% | On the first $12,400 | On the first $24,800 |
| 12% | $12,400 | $24,800 |
| 22% | $50,400 | $100,800 |
| 24% | $105,700 | $211,400 |
| 32% | $201,775 | $403,550 |
| 35% | $256,225 | $512,450 |
| 37% | $640,600 | $768,700 |
O’Saben noted that while the increases are “uneven” across ranges (some adjusted by 3.9% and others by 2.3%), this is a typical result of the IRS’s standard inflation calculation method and not a policy choice to favor any specific income level.
Earned Income Tax Credit Rises
For low-income households, the Earned Income Tax Credit (EITC)—a valuable refundable credit—is also set to increase for 2026. A refundable credit can increase a taxpayer’s refund even if they have little to no income tax liability.
For the 2026 tax year, eligible filers with three or more children may claim a maximum EITC of $8,231, up from $8,046 in the current year.
Taxpayers are encouraged to review the full details of the IRS adjustments, which will affect tax planning for the coming years.
