IRS Inflation Adjustments: Official Tax Limits
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Each fall, the IRS releases annual inflation adjustments for dozens of tax provisions. Revenue Procedure 2025-32 (announced in IR-2025-103) sets the official dollar amounts for tax year 2026 — returns filed in 2027.
This guide complements our OBBBA tax changes guide: the OBBBA covers policy changes (new senior deduction, permanent brackets); this release covers indexed dollar amounts.
Top 2026 Adjustments at a Glance
| Provision | 2026 Amount | 2025 Amount |
|---|---|---|
| Standard deduction (single) | $16,100 | $15,750 |
| Standard deduction (MFJ) | $32,200 | $31,500 |
| Top 37% bracket (single) | Over $640,600 | — |
| Estate/gift exemption | $15,000,000 | $13,990,000 |
| Annual gift exclusion | $19,000 | $18,000 |
| EITC max (3+ children) | $8,231 | $8,046 |
| Adoption credit max | $17,670 | $17,280 |
| FEIE limit | $132,900 | $130,000 |
| Health FSA limit | $3,400 | $3,300 |
| Commuter benefits | $340/month | $325/month |
Tax Brackets and Standard Deduction
The OBBBA made the seven-bracket structure permanent. For 2026, brackets are indexed with a special adjustment for the 10% and 12% rates.
Standard deduction (2026):
- Single / MFS: $16,100
- Married filing jointly: $32,200
- Head of household: $24,150
Additional amounts for age 65+ or blind taxpayers also increased. The new $6,000 senior deduction (OBBBA) is separate and available to taxpayers 65+.
Use the Federal Tax Bracket Calculator and Standard Deduction Calculator.
Estate and Gift Tax
A major update: the estate and gift tax exemption increased to $15 million per person for 2026 (up from $13.99 million in 2025). The OBBBA made this exemption permanent and inflation-indexed — it no longer sunsets.
- Annual gift exclusion: $19,000 per recipient (unchanged indexing from 2025's $18,000)
- Non-citizen spouse gifts: $194,000 annual exclusion
- Estate tax rate: 40% on amounts above the exemption
See the Gift Tax Calculator and Estate Tax Calculator.
Key Tax Credits
Earned Income Tax Credit
Maximum credit for 3+ children: $8,231. Investment income limit: $11,950. Use the EITC Calculator.
Adoption Tax Credit
Maximum: $17,670 per child. Refundable portion: $5,120. Phase-out: $265,080 – $305,080 MAGI. Use the Adoption Tax Credit Calculator.
Child Tax Credit
Remains at $2,200 per qualifying child under OBBBA rules. Use the Child Tax Credit Calculator.
Employee Benefits
Health FSA
Salary reduction limit: $3,400. Maximum carryover: $680.
Commuter Benefits
Transit and qualified parking: $340/month each.
Use the FSA & Commuter Benefits Calculator.
Foreign Earned Income Exclusion
The FEIE increased to $132,900 for 2026. US citizens and residents working abroad who meet qualification tests can exclude this amount from federal income tax. Use the FEIE Calculator.
Alternative Minimum Tax
AMT exemption amounts for 2026:
- Single: $90,100 (phase-out begins at $500,000)
- Married filing jointly: $140,200 (phase-out begins at $1,000,000)
Use the AMT Calculator.
What Did NOT Change
Some provisions are frozen by statute and were not adjusted:
- Lifetime Learning Credit phase-out: still $80,000 – $90,000 (single) / $160,000 – $180,000 (joint). See our LLC income limits guide.
- Personal exemption: Remains at $0 (eliminated by TCJA, made permanent by OBBBA)
- Annual gift exclusion: $19,000 — technically unchanged from the inflation formula (rounded)
Itemized Deductions
The Pease limitation on itemized deductions remains permanently eliminated. However, the OBBBA imposes a new cap on the tax benefit of itemized deductions for taxpayers in the 37% bracket. See our itemized deduction cap guide.
How to Use This Information
- Update your withholding if bracket changes affect your tax liability
- Review open enrollment FSA and commuter elections against new limits
- Plan estate gifting with the $19,000 annual exclusion and $15M lifetime exemption
- Check credit eligibility as income phase-out thresholds shift
Key Takeaways
- Rev. Proc. 2025-32 sets official 2026 indexed amounts
- Estate/gift exemption rose to $15M — no longer sunsetting
- Standard deduction, brackets, and most credits increased modestly
- Some provisions (LLC phase-out) remain frozen since 2020
- Pair this guide with the OBBBA changes guide for complete 2026 tax planning
Calculators: Federal Tax Bracket | Standard Deduction | EITC | Gift Tax | FEIE | FSA & Commuter