What Will the Tax Brackets Be in 2026?

Changes to federal income tax law are scheduled for 2026 that will affect nearly every American taxpayer. These modifications are not from new legislation but from the expiration of temporary provisions enacted years ago. The individual income tax system is set to revert to a previous structure, altering tax rates, deductions, and credits. The adjustments will impact how much tax is owed and how taxable income is calculated.

The Reason for the 2026 Tax Changes

The reason for the tax adjustments is the Tax Cuts and Jobs Act (TCJA), signed into law in late 2017. While the TCJA enacted permanent changes to the corporate tax system, most of the law’s provisions for individual taxpayers were designed to be temporary through “sunset” provisions, which are built-in expiration dates. Unless Congress passes new legislation, these individual tax provisions will automatically expire on December 31, 2025.

On January 1, 2026, the tax code will revert to the rules that were in place before the TCJA’s enactment. This reversion affects tax elements like income tax rates, the standard deduction, and various tax credits. The tax system of 2026 will more closely resemble the one from 2017, with years of inflation adjustments applied to the various thresholds and amounts.

Projected 2026 Income Tax Rates and Brackets

The tax code will return to the seven-rate structure that existed previously. The marginal tax rates are projected to revert to 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. This is a change from the current rates, which include a top rate of 37%. The income thresholds at which these rates apply will also shift, meaning taxpayers may find themselves in a higher tax bracket even if their income remains unchanged.

For a single filer, while the 35% bracket will apply at a higher income threshold in 2026, the top rate of 39.6% will apply to income above approximately $470,700 (adjusted for inflation), a threshold currently taxed at 37%. Couples filing jointly will see a similar structural shift. The 33% bracket is set to return, capturing income that currently falls into the 32% bracket, and the top 39.6% rate will apply at a lower income level than the current 37% top rate.

To illustrate, a single individual with a taxable income of $100,000 would see their top marginal rate move from 24% to a projected 28%. This does not mean all their income is taxed at 28%, but the dollars falling into that bracket will be taxed at a higher rate, leading to a higher overall tax bill.

Changes to Other Key Tax Provisions

Standard Deduction

A change scheduled for 2026 is the reduction of the standard deduction. The TCJA nearly doubled this amount, leading to fewer taxpayers itemizing deductions. In 2026, the standard deduction will be cut by roughly half, reverting to its pre-2018 levels plus inflation. For example, the 2017 base amounts were $6,350 for single filers and $12,700 for married couples filing jointly, which will compel more taxpayers to itemize.

State and Local Tax (SALT) Deduction

The current $10,000 cap on the state and local tax (SALT) deduction will be eliminated. This TCJA provision limited the amount of state and local property, income, or sales taxes that itemizing taxpayers could deduct. Starting in 2026, taxpayers who itemize will be able to deduct the full amount of their state and local tax payments. This change will primarily benefit taxpayers in areas with high property and income taxes, provided they have enough deductions to make itemizing worthwhile.

Child Tax Credit

The Child Tax Credit (CTC) is another provision set for changes. The TCJA increased the credit to $2,000 per qualifying child, but in 2026 it is scheduled to revert to its pre-TCJA amount of $1,000 per child. The refundable portion of the credit will be adjusted, and the income phase-out thresholds will be lowered. For married couples, the credit will begin to phase out at an income level of $110,000, a decrease from the current $400,000 threshold, making the full credit unavailable to many families who currently receive it.

Personal Exemptions

Personal exemptions will return in 2026, a deduction that was eliminated by the TCJA in favor of the higher standard deduction. A personal exemption is a set dollar amount that taxpayers can subtract from their adjusted gross income for themselves, their spouse, and each dependent. The return of this provision will allow taxpayers to reduce their taxable income through these exemptions, though they will be subject to phase-outs at higher income levels. The value of these exemptions will interact with the lower standard deduction.