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INTEL · December 15, 2025
2026 tax brackets and IRS changes: Reference guide
Nerre Shuriah
JD, LLM, CM&AA, CBEC® | Senior Director of Wealth Planning and Knowledge
First Citizens Wealth INTEL: Insights and News—Taxation, Election & Legislation
Each month, we'll cover time-sensitive updates on tax, election and legislative developments that could affect you.
The 2026 IRS tax code changes are now available. Most of the updates reflect inflation adjustments—many aimed, as in prior years, at offsetting inflation's impact on marginal tax brackets and certain deductions and credits.
Additional revisions stem from the One Big Beautiful Bill Act, or OBBBA. The new bill affected several significant areas, including standard deductions, marginal tax rates, alternative minimum tax exemptions and state and local tax, or SALT, deduction limits.
Here's an overview of key changes expected to impact the 2026 tax year.
Who is impacted
These IRS tax brackets updates apply to taxpayers filing 2026 returns in 2027. For context, most of the tables also show 2025 tax-year figures.
Standard deductions
|
2026 deductions |
2025 deductions |
|
|---|---|---|
|
Individual |
$16,100 |
$15,750 |
|
Married filing separately |
$16,100 |
$15,750 |
|
Married filing jointly |
$32,200 |
$31,500 |
|
Head of household |
$24,150 |
$23,625 |
Seniors over age 65 can claim an additional standard deduction of $2,050 for individual filers and $1,650 for joint filers.
OBBBA also established a tax deduction for taxpayers who are at least 65 years old. For the tax years 2025 through 2028, eligible seniors can deduct an additional $6,000 from their taxable income. The deduction phases out for individuals with modified adjusted gross income, or MAGI, over $75,000 and $150,000 MAGI for joint filers.
Marginal tax rates
Under OBBBA, the IRS made existing income tax rates permanent within the following US tax brackets.
|
2026 rates |
Individual income |
Married filing jointly income |
|---|---|---|
|
10% |
$12,400 or less |
$24,800 or less |
|
12% |
Over $12,400 |
Over $24,800 |
|
22% |
Over $50,400 |
Over $100,800 |
|
24% |
Over $105,700 |
Over $211,400 |
|
32% |
Over $201,775 |
Over $403,550 |
|
35% |
Over $256,225 |
Over $512,450 |
|
37% |
Over $640,600 |
Over $768,700 |
Alternative minimum tax exemptions
|
2026 exemption amounts |
2025 exemption amounts |
|
|---|---|---|
|
Individual |
$90,100—begins to phase out at $500,000 |
$88,100—begins to phase out at $626,350 |
|
Married filing separately |
$70,100—begins to phase out at $500,000 |
$68,650—begins to phase out at $626,350 |
|
Married filing jointly |
$140,200—begins to phase out at $1 million |
$137,000—begins to phase out at $1,252,700 |
SALT deduction limits
|
Tax year |
SALT deduction limit |
MAGI phase-out threshold |
|---|---|---|
|
2026 |
$40,400, or $20,200 for married filing separately |
$505,000 for all filers |
|
2025 |
$40,000, or $20,000 for married filing separately |
$500,000 for all filers |
Capital gains tax rates
|
2026 rates |
Individual income |
Married filing jointly income |
Head of household income |
|---|---|---|---|
|
0% |
Less than $49,450 |
Less than $98,900 |
Less than $66,200 |
|
15% |
Over $49,450 |
Over $98,900 |
Over $66,200 |
|
20% |
Over $545,500 |
Over $613,700 |
Over $579,600 |
Child credits
|
2026 credits |
2025 credits |
|
|---|---|---|
|
Adoption tax credit |
Up to $17,670 |
Up to $17,280 |
|
Child tax credit |
$2,220 |
$2,200 |
For the 2026 tax year, the refundable amount of the adoption credit is $5,120, while the refundable amount of the child credit is $1,700.
Health flexible spending plans
|
2026 limitations |
2025 limitations |
|
|---|---|---|
|
Contributions to employee health flexible spending plans |
$3,400 |
$3,300 |
Medical savings accounts
|
2026 amount |
2025 amount |
|
|---|---|---|
|
Deductible for individual coverage |
Between $2,900 and $4,400 |
Between $2,850 and $4,300 |
|
Maximum out-of-pocket expense for individuals |
$5,850 |
$5,700 |
|
Deductible for family coverage |
Between $5,850 and $8,750 |
Between $5,700 and $8,550 |
|
Maximum out-of-pocket expense for families |
$10,700 |
$10,500 |
Other exclusions
|
2026 exclusion |
2025 exclusion |
|
|---|---|---|
|
Annual exclusion gift to noncitizen spouse |
$194,000 |
$190,000 |
|
Estate tax |
$15 million |
$13,990,000 |
|
Annual exclusion for gifts |
$19,000 |
$19,000 |
What action is required and when
Tax returns filed in 2027 for the 2026 tax year must adhere to these IRS updates. To learn how these changes may affect your tax strategy for the year ahead, we recommend discussing them with a tax professional well before the next tax filing season.
Who to talk to now
With numerous tax adjustments taking effect in 2026—including additional stipulations, inflation adjustments and OBBBA amendments that may apply to these 2026 tax brackets and changes—review the IRS news release.
For guidance on how the latest IRS tax changes may influence your 2026 financial plans, connect with a First Citizens Wealth consultant today.
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