The IRS Set the 2027 Standard Deduction at $33,200 for Married Couples and $16,600 for Single Filers, and Raised the Top Earned Income Credit to $8,496

A single filer who subtracts $16,100 from income on a 2026 return will be allowed $16,600 on a 2027 return, and a married couple’s deduction climbs from $32,200 to $33,200. The IRS published the new amounts on Nov. 5 in Revenue Procedure 2026-35, the annual inflation update that also lifts the largest Earned Income Tax Credit from $8,231 to $8,496. None of the 2027 numbers touches the tax bill due next spring, since the agency says they generally apply to returns filed in 2028.

The Standard Deduction Rises $500 for Single Filers and $1,000 for Couples

According to the IRS announcement, the 2027 standard deduction is $33,200 for married couples filing jointly and $16,600 for single filers and married people filing separately. The joint figure is up $1,000 from the year before.

The prior-year amounts came from the Journal of Accountancy’s account of the 2026 adjustments: $32,200 for joint filers and $16,100 for single filers. That puts the single-filer increase at $500 and the joint increase at $1,000.

The standard deduction is the amount most households subtract from income before any tax is figured, so a bigger number shrinks the income that gets taxed. For a couple in the 12% bracket, an extra $1,000 of deduction works out to $120 less tax. In the 22% bracket, the same $1,000 is worth $220. That is simple arithmetic on the published rates, not an IRS estimate, and the actual change on any return depends on how much taxable income sits in which bracket.

Head of Household Filers Gain $775

Unmarried filers who support a child or another qualifying person file as head of household, and their 2027 standard deduction is $24,925, according to the IRS. The 2026 amount was $24,150, so the increase is $775.

That is a larger dollar bump than the one for single filers and a smaller one than for couples. All three amounts rose by roughly the same share. The IRS tied the overall adjustment to inflation, and the Independent Journal Review reported that bracket thresholds went up about 3.2% for 2027.

Taxpayers who are 65 or older or blind get an additional amount on top of the standard deduction. The revenue procedure lists that add-on at $1,700, rising to $2,100 for an unmarried person who is not a surviving spouse.

The Top Earned Income Credit Grows From $8,231 to $8,496

The Earned Income Tax Credit is the federal credit aimed at workers with low and moderate pay, and its size depends on how many qualifying children are in the household. For 2027, Revenue Procedure 2026-35 sets the maximum credit at $8,496 for a filer with three or more qualifying children. The 2026 maximum for the same group was $8,231, so the top credit rises by $265.

The same table in the revenue procedure gives the other maximums for 2027:

A filer with two qualifying children can receive up to $7,552. One qualifying child brings up to $4,573. With no qualifying children, the maximum is $685.

The credit is also off the table for anyone whose investment income exceeds $12,600, according to the revenue procedure. The IRS release itself publishes only the three-or-more-children figure and points readers to the revenue procedure for the rest, so the 2026 comparison for the smaller categories is not stated here.

Because the EITC is refundable, it can produce a refund larger than the tax a household owes.

Brackets Shift About 3.2% Higher, Starting With a 10% Tier That Ends at $12,800

The seven tax rates stay where they are, from 10% to 37%. What moves is the income at which each rate begins. In 2027 the 10% rate applies to taxable income up to $12,800 for single filers and $25,600 for joint filers. In 2026 the same tier ended at $12,400 for single filers and $24,800 for couples, according to the Journal of Accountancy.

The higher tiers, as listed in the Journal of Accountancy’s rundown of the 2027 numbers for single filers, with joint-filer thresholds in parentheses:

The 12% rate starts above $12,800 ($25,600). The 22% rate starts above $52,025 ($104,050). The 24% rate starts above $109,125 ($218,250). The 32% rate starts above $208,325 ($416,650). The 35% rate starts above $264,550 ($529,100). The 37% rate starts above $661,375 ($793,650).

A raise that only keeps pace with inflation can otherwise push a worker into a higher bracket without any gain in buying power. Indexing the thresholds is the mechanism meant to prevent that, and the 2027 update applies it again.

Child Tax Credit, Gifts and Health Accounts Also Get New Limits

Several other household-level limits changed in the same announcement. The maximum Child Tax Credit is $2,300, up $100, and the refundable portion is $1,800, also up $100, according to the IRS.

The annual gift tax exclusion rises from $19,000 to $20,000. The first $20,000 given to any one person in a year is excluded from total taxable gifts. The basic exclusion amount for the estates of people who die in 2027 is $15,480,000, up from $15,000,000.

The health flexible spending account contribution limit goes up $100 to $3,500, and the carryover limit rises $20 to $700. The monthly limit for qualified transportation fringe benefits and parking is $350, up $10. The agency said the personal exemption stays at $0, and the Lifetime Learning Credit phase-out range is not adjusted for inflation.

IRS Chief Executive Officer Frank J. Bisignano said in the announcement that “American individuals and businesses will see increased tax benefits next tax year.”

Taxpayers filing in early 2027 for the 2026 tax year should keep using the 2026 amounts. The 2027 figures matter for paycheck withholding and planning during the coming year, and they become the numbers on returns filed in 2028.

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This article was produced with AI assistance and edited for accuracy against the sources linked above.

Image: Boucher, Jack E. Related names: Price, Virginia B, transmitter – Public domain/Wikimedia Commons