Federal Income Tax Brackets 2026

Each year, the IRS updates more than 60 tax rules to account for inflation and avoid something called 'bracket creep'. Bracket creep happens when inflation increases prices, pushing people into higher tax brackets or reducing the value of credits and deductions they can claim, even if their actual income has not increased.

Before 2018, the IRS (Internal Revenue Service) used the consumer price index (CPI) to measure inflation. However, after the Tax Cuts and Jobs Act of 2017 (TCJA), the IRS switched to using the chained consumer price index (C-CPI) to adjust things like income limits, deduction amounts, and credit values.

In July 2025, a new law called the One Big Beautiful Bill Act (OBBBA) was passed. This law made many of the tax changes from the TCJA permanent, which were originally set to expire at the end of 2025. It also introduced other changes that will affect individual taxes for the 2026 tax year. Keep reading further to know more about the federal income tax brackets for 2026.

Federal Income Tax Brackets and Rates for 2026

For inflation, the income limits for all tax brackets and filers will be adjusted. In 2026, the federal income tax has seven tax rates: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The top marginal income tax rate (37%) will affect taxpayers who have taxable income exceeding:

• For single filers: $640,600
• For married couples filing jointly: $768,700

The OBBBA permanently locks in the TCJA income tax structure. Also, it adjusted income brackets to keep up with inflation, boosting the lowest two tax brackets (10% and 12%) by 4%, while increasing the higher tax brackets by 2-3%. The table below lists the federal income tax brackets and rates for 2026 based on the status of filing:

Standard Deduction and Personal Exemption in 2026

As compared to the 2025 tax year, the standard deduction will increase by $350 for single filers and $700 for joint filers. On top of inflation adjustment in 2026, the OBBBA increased the standard deduction by $750 for single filers and $1,500 for joint filers in 2025 as compared to the prior law.

An additional standard deduction is available for seniors over the age of 65. For single filers, this additional standard deduction is $2,050, and for married couples filing jointly, it is $1,650 for each qualifying spouse. Additionally, seniors can claim a new $6,000 deduction per qualifying taxpayer. However, this will gradually reduce 6% rate for those earning over $75,000 (single) and $150,000 (joint). This is a part of the senior deduction introduced by the OBBBA.

For 2026, the personal exemption remains at $0, as it was eliminated during the TCJA, and this amount became permanent under the OBBBA. The table below lists the 2026 standard deduction based on the status of filing:

Alternative Minimum Tax (AMT) in 2026

In the 1960s, the AMT was created to ensure wealthy taxpayers couldn't avoid the individual income tax. It requires high-income taxpayers to calculate their taxes twice: once under the ordinary income tax system and again under the AMT. After which, the taxpayer is required to pay the higher amount.

Under the AMT, there's an alternative definition of taxable income called alternative minimum taxable income (AMTI). To protect low-and middle-income taxpayers from the AMT, a significant portion of their income is exempt from AMTI. However, this exemption decreases for high-income earners. The AMT has two tax rates: 26% and 28%.

In 2026, the 28% rate applies to amounts AMTI over $244,500 for all taxpayers, and $122,250 for married couples filing separately. The AMT exemption phases out at 50 cents for each dollar earned once AMTI hits $500,000 for singles and $1,000,000 for married couples.

The recent changes brought by the OBBBA reset these phaseout thresholds to what they were in 2018 and sped up the phaseout rates from the previous 25%.

Starting in 2025, the exemption phaseout thresholds were higher, at $625,350 for single filers and $1,252,700 for married filers, making the 2026 changes a small tax hike for some taxpayers.

Below are the AMT exemption phaseout thresholds for 2026:

Earned Income Tax Credit for 2026

For the earned income tax credit (FTC) in 2026, the maximum amount is $664 for single and joint filers without children. If the filer has one child, the maximum credit is $4,427; for two children, it's $7,316, and for three or more children, it's $8,231. Here is a table that lists the earned income tax credit parameters for 2026:

Child Tax Credit in 2026

The Child Tax Credit (CTC) remains the same in both 2025 and 2026, allowing up to $2,200 per qualifying child. Also, this amount will increase with inflation in the future. The OBBBA also made the underlying increased CTC from the TCJA permanent, which boosted the maximum CTC up from $2,000.

The refundable part of the CTC will also be adjusted for inflation and will stay at $1,700 for 2026.

Capital Gains Tax Rates and Brackets 2026 (Long-Term Capital Gains)

Long-term capital gains are taxed differently from regular income in terms of their rates and brackets. The table below lists the capital gains tax brackets for 2026:

Qualified Business Income Deductions for 2026 (Sec. 199A)

Regarding the qualified business income deduction (Sec. 199A), there is a permanent 20% deduction for pass-through businesses. This deduction starts to phase out for taxpayers with income over $201,775 (or $403,500 for joint filers). The recent changes made the phasing in of deduction limits slower, going from $50,000 to $75,000 for single filers and from $100,000 to $150,000 for married filers. The table below lists the thresholds for the qualified business income deduction for 2026:

2026 Annual Exclusion for Gifts

In 2026, gifts up to $19,000 to any person will not be taxed, unchanged from 2025. However, the exclusion for gifts to spouses who are not U.S. citizens has increased from $190,000 to $194,000.

The OBBBA also made the estate tax exemption from the TCJA permanent, raising it to $15 million per person starting in 2026. Also, this amount will be adjusted for inflation in the future.

The Bottom Line

The 2026 federal income tax reflects the most important structural shift in recent years. It is largely driven by the OBBBA, which is permanently locked in the TCJA tax framework that was set to expire. From wider tax brackets and a higher standard deduction to a permanent 20% pass-through deduction. The changes mainly aim to reduce bracket creep and offer relief across income levels. However, high-income earners may attract a modest tax increase due to certain provisions like reset AMT phaseout thresholds.

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