IRS Releases Inflation Adjustments for 2026

A slew of indexed tax limits and benefits adjust each year for inflation. The Internal Revenue Service (IRS) has released Rev.Proc.2025-32, which lists many of these adjustments. Generally, the adjustments amount to about two percent for 2026.

Among the inflation adjustments for 2026 are:

• The maximum salary reduction amount for contributions to health flexible spending arrangements is $3,400. For plans that allow carryovers of unused amounts, the maximum that can be carried over in 2026 is $680.
• The estate tax exclusion will go up to $30 million per couple.
• The amount used to limit the small employer health insurance credit under IRC Section 45R will be $34,100.
• A high-deductible self-only health plan can have an annual deductible that is not less than $2,900 and not more than $4,400. Out of pocket expenses other than for premiums for covered benefits cannot exceed $5,850.
• For high-deductible health plan family coverage, the annual deductible can be not less than $5,850 and not more than $8,750. Annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits cannot exceed $10,700.

Other inflation adjustments announced by the IRS include threshold amounts for the various income tax brackets. The top bracket of 37 percent will start at $768,700 for a married couple. The standard deduction for 2026 will be $32,200 (note, the tax and spending cuts law enacted this past July raised the standard deduction for 2025 from $30,000 to $31,500).

Prospects: There are some 60 tax code provisions that are indexed for inflation. So, more inflation adjustments (e.g., for retirement plan contributions) are expected, although probably not until after the federal government reopens.

NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org