Key Takeaways
Bigger Standard Deductions: Most taxpayers will see slightly higher standard deductions in 2026: $32,200 for married couples filing jointly and $16,100 for single filers.
Expanded Family & Employer Credits: The OBBBA boosts both the adoption credit and the employer-provided childcare credit, offering greater support for families and small businesses.
Higher Thresholds, Same Tax Rates: Although the top rate remains 37%, income brackets, AMT exemptions, and other key limits increase to reflect inflation and reduce tax burdens
Higher Standard Deductions For 2026
The standard deduction is increasing again under OBBBA, helping to simplify filing and reduce taxable income for millions of Americans.
| Filing Status | 2025 Standard Deduction | 2026 Standard Deduction |
| Single/Married Filing Separately | $15,750 | $16,100 |
| Married Filing Jointly | $31,500 | $32,200 |
| Head of Household | $23,625 | $24,145 |
Marginal Tax Rates Stay the Same, But Brackets Adjust
Although the top marginal tax rate remains 37%, income thresholds have shifted slightly.
For single taxpayers, the 37% rate kicks in above $640,600, and for married couples filing jointly, above $768,700.
Here’s how the 2026 brackets look:
- 35% – over $256,225 ($512,450 for joint filers)
- 32% – over $201,775 ($403,550 for joint filers)
- 24% – over $105,700 ($211,400 for joint filers)
- 22% – over $50,400 ($100,800 for joint filers)
- 12% – over $12,400 ($24,800 for joint filers)
- 10% – up to $12,400 ($24,800 for joint filers)
Alternative Minimum Tax (AMT) Relief
For tax year 2026, the AMT exemption rises to $90,100 for single taxpayers and $140,200 for joint filers. The phase-out thresholds increase to $500,000 (single) and $1M (joint), providing some additional relief from this parallel tax system.
Estate and Gift Tax Updates
Estates of decedents who die in 2026 will have a basic exclusion amount of $15 million, up from $13.99 million in 2025.
- Annual Gift Exclusion: Remains at $19,000 per recipient for 2026.
- Gifts to Non-Citizen Spouses: Increases to $194,000, up from $190,000 in 2025.
Adoption and Childcare Tax Benefits
The Adoption Credit increases to $17,670 for qualified expenses (up from $17,280 in 2025). A portion ($5,120) may be refundable.
- Employer-Provided Childcare Credit: Eligible small businesses can now claim up to $500,000, or $600,000 for providing childcare assistance to employees.
Other Key Indexed Adjustments
- Earned Income Tax Credit (EITC): The maximum credit for taxpayers with three or more qualifying children rises to $8,231 (from $8,046).
- Transportation & Parking Fringe Benefits: Monthly limit increases to $340.
- Health Flexible Spending Accounts (FSA): Contribution limit increases to $3,400; carryover limit rises to $680.
- Medical Savings Accounts (MSA):Self-only coverage:
- Self-only coverage: deductible range $2,900 to $4,400; out-of-pocket limit $5,850.
- Family coverage: deductible range $5,850 to $8,750; out-of-pocket limit $10,700.
- Foreign Earned Income Exclusion: Increases to $132,900 (up from $130,000).
The Bottom Line
The One Big Beautiful Bill Act introduces moderate but meaningful adjustments aimed at keeping tax thresholds in line with inflation while expanding credits for families and employers. Taxpayers should review their withholding, update planning strategies, and be mindful of how these changes may affect their 2026 tax liability.