California taxpayers will see several changes to their federal taxes in 2027, including higher standard deductions, expanded tax credits and new income thresholds for federal tax brackets. As reported by Patch, the IRS announced nearly 70 inflation-related adjustments on November 6, affecting how much individuals and families may owe.
The changes are designed to keep inflation-related salary increases from pushing people into higher tax brackets or reducing the value of certain tax benefits. However, they won’t affect everyone equally, and California’s state income tax rules are not changing as part of this announcement.
The standard deduction is going up
One of the biggest changes affects the standard deduction, the amount you can subtract from your income before calculating your federal income tax. Most taxpayers use this deduction instead of listing individual eligible expenses. For the 2027 tax year, the standard deduction will increase to:
- $16,600 for single filers, up $500.
- $33,200 for married couples filing jointly, up $1,000.
- $24,925 for heads of households, up $775.
- $16,600 for married people filing separately, up $500.
Families could qualify for larger tax credits
Parents may also benefit from an increase in the federal Child Tax Credit. The maximum amount will rise by $100, from $2,200 to $2,300 per qualifying child. The maximum refundable portion, which eligible taxpayers can receive even if they owe no federal income tax, will increase to $1,800.
The Earned Income Tax Credit (EITC), which helps eligible low- and moderate-income workers, is also increasing. For taxpayers with at least three qualifying children, the maximum credit will go from $8,231 to $8,496.
These adjustments apply to income earned during the 2027 tax year. That means you’ll generally see them when you file your federal tax return in 2028, not when you submit your 2026 return early next year.
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