The return you file in early 2027 covers the 2026 tax year. Most of the big changes from the 2025 tax law, which the IRS now calls the Working Families Tax Cuts, started with last year's return and carry over. A handful are brand new for 2026, and almost every dollar figure has moved for inflation.
This guide walks through all of it: what's new, what got bigger, what's still here from last year, and the new forms and codes you'll see. Each section says who it affects, so you can skip what doesn't apply to you.
At a glance
| Change | New for 2026? | Who it affects |
|---|---|---|
| Charitable deduction without itemizing | Yes | Anyone who gives cash to charity and takes the standard deduction |
| 0.5% floor on itemized charitable gifts | Yes | Itemizers who give to charity |
| Limit on itemized deductions at the top bracket | Yes | Itemizers with very high incomes |
| No cap on paying back Marketplace premium credits | Yes | People with Marketplace health insurance |
| 1099-NEC and 1099-MISC threshold rises to $2,000 | Yes | Freelancers and contractors |
| New W-2 codes for tips, overtime and Trump accounts | Yes | Tipped workers, hourly workers, parents |
| Standard deduction and brackets adjusted for inflation | Yearly | Everyone |
| SALT cap rises to $40,400 | Yearly increase | Itemizers in higher-tax states |
| Tips, overtime, senior and car loan deductions | Second year | Workers, people 65+, new-car buyers |
New this year
A charitable deduction even if you don't itemize
Starting with 2026, you can deduct cash gifts to eligible charities without itemizing. The most you can deduct is $1,000, or $2,000 if you're married filing jointly.
This matters because about nine in ten filers take the standard deduction, and until now they got no tax break for giving. A few rules:
- It has to be a cash gift: cash, check, card or electronic transfer. Donated clothes, furniture or stock don't count toward this deduction.
- It has to go to an eligible charity. Gifts to donor-advised funds generally don't count.
- Keep a receipt or bank record for every gift, and a written acknowledgment from the charity for any single gift of $250 or more.
Example: Lena is single, takes the standard deduction, and gave $600 to her food bank and $250 to her church in 2026. She can deduct $850.
A floor on charitable deductions if you do itemize
If you itemize, only the part of your charitable gifts above 0.5% of your adjusted gross income is deductible. For example, with an adjusted gross income of $80,000, the first $400 of gifts isn't deductible. With $200,000, the first $1,000 isn't.
A limit on itemized deductions at the highest incomes
If you itemize and your income reaches the top tax bracket, your itemized deductions may be trimmed. The reduction applies above $640,600 of taxable income for single filers and heads of household, and $768,700 for married couples filing jointly. If that's you, your tax software will figure it.
No cap on paying back Marketplace health insurance help
If you bought health insurance through HealthCare.gov or a state Marketplace and got monthly help with premiums, you settle up on your return. In past years, many people who got too much help only had to repay a limited amount. Starting with 2026, there's no cap. You repay the full difference. Read our full guide to Form 1095-A and the premium tax credit.
Fewer 1099 forms for small amounts
Businesses now have to send a Form 1099-NEC or 1099-MISC only for payments of $2,000 or more, up from $600. Payment apps and marketplaces send a Form 1099-K only if you received more than $20,000 across more than 200 transactions.
Fewer forms doesn't mean less income to report. Freelance and side income is taxable whether or not you get a form. Read our guide to gig and freelance income.
New boxes on your W-2
Your 2026 W-2 has new codes in box 12:
- Code TP: total cash tips you reported to your employer
- Code TT: total qualified overtime compensation
- Code TA: employer contributions to a Trump account
Box 14 is now split into 14a (other information, as before) and 14b, which shows the tipped occupation code for tipped workers.
Trump accounts for children
The 2025 law created Trump accounts, a new kind of individual retirement account for children under 18. Starting July 4, 2026, employers can contribute up to $2,500 a year to the account of an employee or an employee's child, tax-free to the employee. Total contributions to an account are generally limited to $5,000 a year.
Bigger numbers for 2026
Standard deduction
| Filing status | 2025 | 2026 |
|---|---|---|
| Single or married filing separately | $15,750 | $16,100 |
| Married filing jointly | $31,500 | $32,200 |
| Head of household | $23,625 | $24,150 |
If you're 65 or older or blind, you add $1,650 per condition if married, or $2,050 if single or head of household.
Tax brackets
| Rate | Single | Married filing jointly |
|---|---|---|
| 10% | Up to $12,400 | Up to $24,800 |
| 12% | $12,401 to $50,400 | $24,801 to $100,800 |
| 22% | $50,401 to $105,700 | $100,801 to $211,400 |
| 24% | $105,701 to $201,775 | $211,401 to $403,550 |
| 32% | $201,776 to $256,225 | $403,551 to $512,450 |
| 35% | $256,226 to $640,600 | $512,451 to $768,700 |
| 37% | Over $640,600 | Over $768,700 |
These rates apply to taxable income, which is your income after deductions.
Credits and limits
| 2025 return | 2026 return | |
|---|---|---|
| Child tax credit, per child | $2,200 | $2,200 |
| Refundable part of the child tax credit | $1,700 | $1,700 |
| State and local tax (SALT) deduction limit | $40,000 | $40,400 |
| Adoption credit, maximum | $17,280 | $17,670 |
The SALT limit shrinks for people with modified adjusted gross income over $505,000, but never below $10,000. If you're married filing separately, the limits are half. The adoption credit is now partly refundable, up to $5,120 for 2026.
Earned income credit for 2026
| Qualifying children | Maximum credit | Credit ends at income of (single) | Credit ends at income of (married filing jointly) |
|---|---|---|---|
| None | $664 | $19,540 | $26,820 |
| One | $4,427 | $51,593 | $58,863 |
| Two | $7,316 | $58,629 | $65,899 |
| Three or more | $8,231 | $62,974 | $70,244 |
You can't claim the earned income credit if your investment income is more than $12,200.
Still here from last year
Four deductions started with 2025 returns and run through 2028. You can take them whether or not you itemize, and each one shrinks as income rises. Navo includes all four: it asks what it needs and fills in Schedule 1-A for you.
| Deduction | Maximum | Starts phasing out above | Full guide |
|---|---|---|---|
| Qualified tips | $25,000 | $150,000 ($300,000 joint) | No tax on tips |
| Qualified overtime | $12,500 ($25,000 joint) | $150,000 ($300,000 joint) | No tax on overtime |
| Senior deduction, 65+ | $6,000 per person | $75,000 ($150,000 joint) | The $6,000 senior deduction |
| Car loan interest | $10,000 | $100,000 ($200,000 joint) | Car loan interest |
For tips, overtime and the senior deduction, you need a valid Social Security number, and married couples have to file jointly.
What to do now
- Save charity receipts, even if you don't itemize. Up to $1,000 ($2,000 joint) of cash gifts is now deductible.
- Tell the Marketplace about income changes before the year ends, if you get premium help.
- Check your last pay stub of the year for tips and overtime, so you know what to expect on your W-2.
- Keep your car purchase contract if you bought a new vehicle with a loan.
- Make a list of everyone who paid you if you freelance, since you may not get a form from all of them.
Frequently asked questions
When can I file my 2026 return? The IRS usually starts accepting returns in late January. The deadline for most people is April 15, 2027.
Do I need to itemize to get the new deductions? No. The charitable deduction for non-itemizers, and the tips, overtime, senior and car loan deductions, all work with the standard deduction.
Did the child tax credit go up for 2026? No. It stays at $2,200 per child, with up to $1,700 refundable.
Is my state following these changes? Each state decides. Many start from federal adjusted gross income, which most of these deductions don't change, so your state return may look different.
Related guides
- How to get your refund faster
- Do you need to file a tax return?
- Can ChatGPT, Claude or Gemini do your taxes?
This post is general information, not tax advice for your situation. Sources: IRS, Working Families Tax Cuts: individuals and workers; IRS Publication 505 (2026); Revenue Procedure 2025-32; 2026 Instructions for Forms W-2 and W-3; Instructions for Forms 1099-MISC and 1099-NEC; IRS, Repayment caps eliminated for excess advance payments of the premium tax credit.