IRS Releases 2027 Tax Brackets as Standard Deduction Climbs to $16,600

Washington — The Internal Revenue Service has released the federal income-tax brackets for 2027, raising the income thresholds for all seven tax rates by about 3.2% to reflect inflation. The standard deduction rises to $16,600 for single filers and $33,200 for married couples filing jointly, while the child tax credit climbs to $2,300.

The changes were announced on Thursday, November 5, 2026, in Revenue Procedure 2026-35, the IRS’s annual inflation-adjustment package, which updates about 70 tax provisions at once. The seven rates stay at 10% to 37%; only the income levels where each begins move higher. The figures apply to income earned in 2027, claimed on returns filed in early 2028.

Key Points

• The IRS raised 2027 federal income-tax brackets and about 70 other provisions by about 3.2% in Revenue Procedure 2026-35.
• The standard deduction rises to $16,600 for single filers, up $500 from $16,100, and to $33,200 for married couples filing jointly, up $1,000 from $32,200. Heads of household get $24,925.
• The top 37% rate will apply to taxable income above $661,375 for individuals and above $793,650 for married couples, up nearly $25,000 for couples.
• The child tax credit rises to $2,300, up from $2,200, and the SALT deduction cap rises 1% to $40,804 under the 2025 tax law.
• The maximum earnings subject to Social Security tax rises to $192,300, and the alternative minimum tax exemption rises to $93,000 for singles and $144,700 for joint filers.

What Happened

The IRS publishes the inflation-adjusted figures every autumn, and this year’s release landed on November 5, 2026. The 3.2% adjustment is the largest in several years and reflects the rise in consumer prices measured over the 12 months ending in August. Because the adjustment is automatic — set by statute, not by Congress — it takes effect without any new legislation.

For most taxpayers, the headline number is the standard deduction. Single filers will be able to shield $16,600 of income from federal tax in 2027, $500 more than the $16,100 allowed for 2026. Married couples filing jointly get $33,200, up $1,000 from $32,200, and heads of household get $24,925. The higher deduction means a smaller share of each pay cheque is taxed, and it is why most filers do not itemise.

Several other figures moved too. The child tax credit rises to $2,300 per qualifying child, up from $2,200. The SALT cap rises 1% to $40,804 under the 2025 tax law. The maximum earnings subject to Social Security tax climbs to $192,300, so higher earners pay the 6.2% payroll tax on more wages. The alternative minimum tax exemption rises to $93,000 for singles and $144,700 for joint filers, and health savings account limits rise to $4,500 for self-only and $9,000 for family coverage.

Background: How Inflation Adjustments Work

Federal tax brackets are indexed to inflation so that a pay rise that merely keeps pace with the cost of living does not push a worker into a higher tax bracket. Without that protection, known as bracket creep, inflation alone would raise people’s tax bills even when their real income had not grown. Congress built the indexing into the tax code decades ago, and the IRS applies it each year.

Tax year 2027 is also the second full year under the 2025 Republican tax law, which set the SALT cap on a rising path of 1% a year — hence the $40,804 figure — and locked in the current seven-rate structure, so the 2027 release changes where the rates bite, not the rates themselves.

2027 Tax Brackets: What Changes for Filers

The practical effect depends on where a household sits on the income scale. A single filer earning $70,000 will find more of that income taxed at 12% rather than 22%, because the 22% threshold has moved higher. A married couple earning $200,000 will likewise keep more income in the lower brackets. The benefit is modest for any one household — a few hundred dollars for many middle-income filers — but it applies to almost every taxpayer.

The higher standard deduction matters most for the roughly nine in ten filers who do not itemise: $16,600 of income never enters the tax calculation for a single filer, and $33,200 for a married couple. Families will also notice the child tax credit, up to $2,300 per child, which cuts the tax bill dollar for dollar. The release does not change anyone’s tax rate: a taxpayer in the 22% bracket stays there; the brackets simply start at higher incomes.

Reactions and Quotes

The release was covered widely in the financial press, with the Wall Street Journal and MarketWatch leading on the standard deduction and the top-rate thresholds. The figures are closely watched each year by payroll departments, tax preparers and financial planners, because they feed directly into withholding tables. Employers will now update their payroll systems so the new thresholds reach workers’ pay cheques from January 2027.

Why It Matters

The annual bracket release is one of the most consequential dates in the tax calendar, even though it attracts far less attention than a new tax law. It determines how much of every American’s pay is taxed for the entire year ahead. The 3.2% adjustment stops inflation from quietly raising tax bills, and its size reflects the price pressures households have felt. Because the figures are known now, workers can check their withholding, families can budget around the $2,300 child tax credit, and higher earners can see how much more of their pay faces Social Security tax.

What Happens Next

The new figures take effect on January 1, 2027. Employers and payroll providers will roll the updated withholding tables into their systems before then, so most workers will see the effect in their first pay cheque of the new year, and the IRS will publish the full set of 2027 forms and instructions in the coming weeks. Taxpayers need do nothing to benefit — the higher deduction and new brackets apply automatically — but the release is a useful prompt to review withholding, especially for anyone whose income changed in 2026. Returns for 2027 will be filed in early 2028.

Frequently Asked Questions

What is the standard deduction for 2027?
The standard deduction for 2027 is $16,600 for single filers, $33,200 for married couples filing jointly and $24,925 for heads of household.

What are the 2027 federal income-tax rates?
The seven rates are unchanged at 10%, 12%, 22%, 24%, 32%, 35% and 37%; only the income thresholds have risen, by about 3.2%.

When does the top 37% rate apply in 2027?
The 37% rate applies to taxable income above $661,375 for individuals and above $793,650 for married couples filing jointly.

How much is the child tax credit in 2027?
The child tax credit rises to $2,300 per qualifying child in 2027, up from $2,200 in 2026.

When do the 2027 tax brackets take effect?
The figures apply to income earned in 2027, claimed on tax returns filed in early 2028. Employers will use the new withholding tables from January 2027.

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