2026 Tax Inflation Adjustments: What You Need to Know

Each year, the Internal Revenue Service (IRS) updates certain tax provisions to account for inflation — and this year is no different.

However, the 2026 tax year is seeing some additional adjustments not just for inflation, but to reflect changes under the One Big Beautiful Bill Act (OBBBA) as well.

Although these changes won't go into effect until the 2026 tax year, it's never too early to start thinking and planning ahead. So, what kinds of changes can taxpayers expect to see?

Important 2026 Updates

Perhaps the most notable change we'll see beginning with the 2026 tax year is an adjustment to the standard deduction, which taxpayers can take when they choose not to itemize. For 2026, the standard deduction for married couples filing jointly will jump to $32,200, while the deduction for single taxpayers will also increase, to $16,100. This is an increase of $700 for married couples filing jointly and $350 for single filers, respectively.

In addition to inflation adjustments for the standard deduction, the IRS has also announced that the top marginal tax rate for individual taxpayers will remain stable at 37%, with the lowest rates set at 10% for households making $24,800 or less per year.

Additional changes based on inflation and provisions of OBBBA include:

• An updated exemption amount for the Alternative Minimum Tax (AMT). Specifically, $90,100 for single filers and $140,200 for married couples filing jointly.
• A significant increase of the maximum amount of employer-provided childcare tax credits from $150,000 to $500,000 (and up to $600,000 for eligible small businesses).
• Updated adoption credits, with a maximum credit of $17,670 in 2026 and a refundable portion of up to $5,120.
• An updated basic exclusion amount of $15 million for estate tax credits, available for the estates of decedents who die in 2026.
  
  
  

Other Considerations

Aside from the notable updates above, some additional tax provisions may be affected by indexing in 2026. This includes:

• Annual exclusions for gifts, with an increase to $195,000 for spouses who are not United States citizens. Other exclusion amounts remain the same.
• Higher Earned Income Tax Credit (EITC) amounts of up to $8,231 for families with three or more qualifying children.
• Changes to medical savings accounts, including increases in required out-of-pocket max and deductible expenses.
• Updated amounts for qualified transportation fringe benefits in the amount of $340 (up $15 from 2025) per month.
• A higher foreign earned income exclusion of $132,900 (an increase of nearly $3,000 compared to the 2025 tax year).

What's Not Changing?

As you can see, many tax provisions and benefits are changing for the 2026 tax year. These changes account not only for inflation, but for updates under OBBBA as well.

With so much change, you might be wondering, “Is there anything that will stay the same in the coming tax year?”

Yes. In fact, there are a number of tax provisions that were already indexed for inflation in previous tax years and thus will not be changing for 2026. This includes, perhaps most notably, the personal exemption for taxpayers. For 2026, personal exemptions will remain at 0 as a continued provision of the Tax Cuts and Jobs Act of 2017 that was made permanent under OBBBA.

Likewise, those who choose to itemize their deductions rather than take the standard deduction will not be impacted by any changes. Under OBBBA, the limitation on itemized deductions was permanently eliminated, with an exception for those in the highest tax bracket.

Finally, the Lifetime Learning Credit has not changed for the 2026 tax year. As with previous years, it begins to phase out for single taxpayers making between $80,000 and $90,000 per year.

Start Planning Ahead for Tax Season

With so many changes coming in the 2026 tax year, now is a good time to start planning ahead and strategizing so you can maximize your credits and deductions.

Some of these changes may take some time and planning to acclimate to, and it might even be worth scheduling a meeting with your tax advisor to discuss how your tax planning may need to change moving forward.

By taking full advantage of the credits and deductions available to you, you may be able to minimize your taxes owed and keep more of your hard-earned money in your pocket when it comes time to file.

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