The IRS has published its annual inflation updates for the 2027 tax year, raising both the standard deduction and the child tax credit.
Taxpayers will experience these changed figures on returns filed in 2028.
Most of the updates released on Nov. 5 reflect standard yearly increases tied to price growth, translating to roughly a 3.2% rise for 2027. However, several popular tax provisions introduced by Republicans in their 2025 law remain fixed without inflation indexing, reducing their real-term value over time.
The standard deduction for single taxpayers will climb to $16,600 from $16,100. For married couples filing jointly, the allowance will rise from $32,200 to $33,200, while the rate for heads of household will grow from $24,150 to $24,925.
According to Associated Press calculations, a married couple earning $100,000 using the standard deduction will see their federal tax bill fall to $7,504 from $7,640. A single filer earning $60,000 will see a drop from $5,020 to $4,952. These models assume unchanged incomes; workers whose wages rise alongside inflation will see overall tax liabilities remain largely constant.
The maximum earned income tax credit for childless workers will rise to $685 from $664, while the top credit for households with two children will increase to $7,552 from $7,316.
The child tax credit increases by $100 to a cap of $2,300 per child, with the refundable portion rising to $1,800. The 2025 law fixed the baseline at $2,200 and tied future growth to inflation.
Several provisions within the 2025 legislation lack inflation adjustments. Taxpayers may still deduct up to $25,000 in tip earnings and $12,500 in overtime pay, or $25,000 jointly, while individuals 65 and older retain an extra $6,000 deduction. These three relief measures expire after 2028 unless extended by Congress.
The estate tax exemption, permanently set at $15 million under the 2025 law, increases with inflation to $15.48 million.
The highest income tax bracket stays at 37%, applying in 2027 to earnings above $661,375 for single filers and $793,650 for married joint returns.
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