Significantly affects federal taxes, credits and deductions. It was signed into law on July 4, 2025, as Public Law 119-21, and takes effect in 2025.
Standard deduction increases
Tax year 2026
- $32,200 for married couples filing jointly
- $16,100 for single filers and married individuals filing separately
- $24,150 for heads of household
Tax year 2025
- $31,500 for married couples filing jointly
- $15,750 for single filers and married individuals filing separately
- $23,625 for heads of household
Marginal rates for tax year 2026
- 37% for income over $640,600 (single) or $768,700 (married filing jointly)
- 35% for income over $256,225 (single) or $512,450 (married filing jointly)
- 32% for income over $201,775 (single) or $403,550 (married filing jointly)
- 24% for income over $105,700 (single) or $211,400 (married filing jointly)
- 22% for income over $50,400 (single) or $100,800 (married filing jointly)
- 12% for income over $12,400 (single) or $24,800 (married filing jointly)
- 10% for income up to $12,400 (single) or $24,800 (married filing jointly)
Alternative minimum tax exemption amounts for tax year 2026
- $90,100 for single filers (phased out at $500,000)
- $140,200 for married couples filing jointly (phases out at $1,000,000)
Estate tax exclusion for tax year 2026
- Basic exclusion amount is $15,000,000
- Up from $13,990,000 for 2025 decedents
Adoption credit limits for tax year 2026
- Maximum adoption credit is $17,670, which is higher than the $17,280 limit for 2025.
- Up to $5,120 of this credit may be refundable.
Employer-provided childcare credit expansion for tax year 2026
- Maximum amount increases from $150,000 to $500,000
- Maximum increase to $600,000 if employer is an eligible small business
