Your paycheck could be a little bigger in 2026 based on the latest IRS tax bracket changes and updates enacted via President Donald Trump’s “big beautiful bill.”
The IRS in October released new federal income tax brackets for 2026. The inflation-based change increased the income ranges for the two lowest tax brackets by about 4%, and the higher ones by roughly 2.3% compared to 2025. The agency also unveiled inflation adjustments for the standard deductions, capital gains brackets and other provisions.
Plus, workers will see 2026 paycheck withholding changes “layered on top of that,” based on Trump’s new law, according to Garrett Watson, director of policy analysis at the Tax Foundation. Withholdings dictate how much employers retain for income and payroll taxes.
Enacted in July, Trump’s legislation permanently extended his 2017 tax cuts, boosted the standard deduction, increased the child tax credit and added several temporary tax breaks. Those cuts include a bonus deduction for seniors, a bigger state and local tax deduction, tax breaks on tips and overtime income, among other provisions.
Many of these changes applied to 2025, but the IRS did not adjust withholding tables, and workers’ paychecks generally stayed the same through year-end. As a result, many could see a bigger tax refund when filing 2025 returns in 2026, experts say.
