IRS Announces Increased Child Tax Credit and Deductions for 2027 Tax Year
The Internal Revenue Service (IRS) has announced new inflation adjustments for the 2027 tax year, which will impact tax returns filed in 2028. These changes include an increase in the Child Tax Credit to $2,300, up $100 from 2026. The Earned Income Tax Credit (EITC) maximum amount will rise to $8,496 for eligible taxpayers with three or more children, an increase from $8,231 in 2026. Additionally, the standard deduction for married couples filing jointly will increase to $33,200, a $1,000 rise from 2026, while single filers will see their standard deduction increase to $16,600. The maximum allowable credit for adoption expenses will also increase to $18,250, with up to $5,280 being refundable. The annual gift tax exclusion will go from $19,000 to $20,000. These adjustments are part of the IRS's annual process to account for inflation across nearly 70 tax provisions, aiming to ensure that taxpayers' buying power is not diminished by nominal income increases pushing them into higher tax brackets.
