The Internal Revenue Service on Thursday announced its tax year 2027 inflation adjustments for almost 70 tax provisions, including tax rate schedules and standard deduction amounts. Revenue Procedure 2026-35 gives the full details, the agency said.
The adjustments generally apply to tax returns filed in 2028. They affect individual taxpayers, families and businesses.
| Item | 2027 amount | Change from 2026 |
|---|---|---|
| Standard deduction, married filing jointly | $33,200 | Up $1,000 |
| Maximum child tax credit | $2,300 | Up $100 |
| Refundable part of child tax credit | $1,800 | Up $100 |
| Maximum EITC, three or more children | $8,496 | Up from $8,231 |
| Estate tax basic exclusion | $15,480,000 | Up from $15,000,000 |
| Annual gift exclusion | $20,000 | Up from $19,000 |
| Section 179 expensing limit | $2,640,000 | Up from $2,560,000 |
| Monthly transportation fringe benefit limit | $350 | Up $10 |
| Health flexible spending arrangement limit | $3,500 | Up $100 |
| Foreign earned income exclusion | $137,300 | Up from $132,900 |
For tax year 2027, the standard deduction for married couples filing jointly rises to $33,200, up $1,000 from 2026. It is $16,600 for single filers and married people filing separately, and $24,925 for heads of households. The IRS did not give 2026 figures for those two categories in the announcement.
The top tax rate stays at 37%. It applies to single filers with incomes above $661,375 and to married couples filing jointly with incomes above $793,650. The 10% rate applies to single filers with incomes of $12,800 or less, and to joint filers with incomes of $25,600 or less. The 12% rate starts above those amounts, and the 22%, 24%, 32% and 35% rates start at higher income levels listed in the revenue procedure.
The maximum child tax credit for 2027 is $2,300, up $100 from 2026. The portion that may be refundable, meaning it can be paid out even if it exceeds the tax owed, is $1,800, also up $100. The maximum Earned Income Tax Credit for filers with three or more qualifying children is $8,496, up from $8,231.
For estates of people who die in 2027, the basic exclusion amount is $15,480,000, up from $15,000,000 for 2026. The annual gift exclusion is $20,000, up from $19,000.
Businesses can expense up to $2,640,000 of section 179 property in 2027, up from $2,560,000. Section 179 lets a business deduct the cost of certain equipment in the year it is bought. The limit for sport utility vehicles is $33,100, up from $32,000. The maximum employer-provided childcare tax credit rises to $515,943.67 from $500,000, or to $619,132.40 for an eligible small business.
Other limits also rise. The monthly limit for the qualified transportation fringe benefit and for qualified parking is $350, up $10. The limit on employee salary reductions for health flexible spending arrangements is $3,500, up $100. The foreign earned income exclusion is $137,300, up from $132,900.
Some items are not adjusted. Personal exemptions stay at zero, and the income range for phasing out the Lifetime Learning Credit stays at $80,000 to $90,000 ($160,000 to $180,000 for joint returns).
IRS Chief Executive Officer Frank J. Bisignano said taxpayers will see increased tax benefits next tax year under what the agency calls the Working Families Tax Cuts.
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