IRS: Standard Deduction Rises in 2027, Child Credit Reaches $2,300

The IRS announced that the standard deduction and the child tax credit will increase for the 2027 tax year. On November 5, 2026, the agency released the annual inflation adjustments for nearly 70 tax provisions, including tax brackets. The details are in Revenue Procedure 2026-35.

Why it matters: with a higher standard deduction, a larger portion of income will be tax-free. These amounts generally apply to returns filed in 2028, not the upcoming tax season. Frank J. Bisignano, IRS executive director, said taxpayers will see increases in the standard deduction and child credit.

2027 Standard Deduction

2027 amounts:

• $33,200 for married couples filing jointly (up $1,000 from 2026).
• $16,600 for single people and married individuals filing separately.
• $24,925 for heads of household.

New Tax Brackets

These are the 2027 tax brackets for single people and, in parentheses, for married couples filing jointly:

• 10% up to $12,800 ($25,600).
• 12% for income over $12,800 ($25,600).
• 22% for income over $52,025 ($104,050).
• 24% for income over $109,125 ($218,250).
• 32% for income over $208,325 ($416,650).
• 35% for income over $264,550 ($529,100).
• 37%, the top rate, which remains unchanged, for income over $661,375 ($793,650).

Family Credits

• Child tax credit: up to $2,300 per child, $100 more than in 2026. The refundable portion is up to $1,800, also $100 more.
• Earned Income Tax Credit (EITC): up to $8,496 for those with three or more qualifying children, compared to $8,231 in 2026.
• Adoption credit: up to $18,250 in qualified expenses (previously $17,670), with up to $5,280 refundable.

Other Changes

• The limit on payroll contributions to health flexible spending accounts (FSAs) rises to $3,500 ($100 more). The maximum carryover of unused balance, where the plan allows it, is $700 ($20 more).
• The employer-provided transportation and parking benefit will be $350 per month ($10 more).
• Up to $20,000 can be gifted per person without being subject to gift tax (previously $19,000).
• The personal exemption remains at $0.

What You Can Do

• Don’t confuse these amounts with those for the upcoming tax season: they generally apply to the 2028 return.
• Review your tax withholding at work if your income changes.
• Take advantage of the increased FSA limit if your employer offers it.
• Check if you qualify for the EITC.
• Consult the IRS release or an authorized tax preparer.

Source: IRS, release IR-2026-133 on inflation adjustments for 2027. Data consulted on November 6, 2026.