IRS Updates 2026 Tax Brackets, Raises Deductions, Credits Nationwide

The IRS has announced the 2026 federal tax brackets and related inflation adjustments, which will likely reduce tax bills for many Americans despite income increases. Tax thresholds across all brackets have been raised by approximately 2.7%, and the standard deduction has increased by 7.3%, providing broader relief to taxpayers, especially those in middle-income brackets; for example, a single filer earning $100,000 may pay about $279 less in taxes than in 2025. Other adjustments include increases in the Alternative Minimum Tax exemption, estate and gift tax exclusions, and boosts to tax credits such as the Earned Income Tax Credit and adoption credit. Additionally, the IRS delayed planned updates to withholding tables and information reporting until the 2026 tax year to avoid disruption for employers and payroll processors. The IRS also issued an update to the inflation adjustments related to the low-income housing credit, reflecting legislative changes to increase state allocations starting in 2026.