Tax changes for 2026 include higher standard deductions and expanded credits that could increase after-tax income for millions of American taxpayers. The standard deduction rises to $32,200 for married couples filing jointly, $16,100 for single filers, and $24,150 for heads of household, according to the IRS, representing an approximately 2.2% increase from 2025.
These changes stem from the One Big Beautiful Bill Act (OBBBA), which made provisions from the earlier Tax Cuts and Jobs Act permanent while adding new benefits. The IRS released the 2026 inflation adjustments in October 2025, incorporating both standard inflation indexing and amendments from the legislation.
Expanded Credits and Additional Deductions
The Child Tax Credit rises to $2,200 per qualifying child under age 17, up from $2,000, according to multiple sources including the Institute on Taxation and Economic Policy. Beginning in 2026, this amount will be adjusted annually for inflation, making it the first time the credit receives automatic indexing.
A significant benefit for older taxpayers is a new deduction of $6,000 for individuals age 65 and older, or $12,000 for married couples filing jointly, according to Fidelity and House.gov guidance. This deduction is available through 2028 and sits on top of both the regular standard deduction and the existing additional standard deduction for seniors (which is $2,050 for single filers in 2026).
The Tax Foundation estimates that the OBBBA’s provisions will increase after-tax income by 4.0 percent in 2026, with middle- and high-income consumers standing to benefit most from the expanded deductions and credits. The more generous standard deduction also improves tax simplicity by reducing the number of taxpayers who need to itemize their deductions, according to the Tax Foundation.
How These Changes Affect Your Tax Planning
The higher standard deduction means more income is protected from taxation without requiring taxpayers to document itemized deductions. For families with children, the $200-per-child increase in the Child Tax Credit provides direct relief, though the benefit phases out at higher income levels: $400,000 for married couples filing jointly and $200,000 for other filers.
Tax refunds are expected to be approximately 20% larger in 2026 compared to prior years, according to Morgan Stanley analysis cited in search results, driven largely by these expanded deductions and credits. However, the actual impact varies by income level and family structure, making it important for taxpayers to review their withholding and filing status before the year ends.
These permanent changes represent a shift from the temporary provisions that were set to expire at the end of 2025. By making the higher standard deductions and expanded credits permanent and indexed for inflation, Congress and the administration have locked in tax relief that will adjust automatically each year.
Sources
- IRS — Confirmed 2026 standard deduction amounts and Child Tax Credit details in official tax inflation adjustment announcement
- Tax Foundation — Provided analysis of OBBBA impact on after-tax income and tax simplicity
- Institute on Taxation and Economic Policy — Detailed Child Tax Credit increase to $2,200 and inflation indexing beginning 2026
- Fidelity — Explained new $6,000 senior deduction and how it stacks with existing deductions
- TurboTax — Reported 2.2% increase in standard deduction amounts from 2025 to 2026
- Morgan Stanley — Estimated 20% larger tax refunds in 2026 from expanded deductions and credits
