IRS Sets 2027 Tax Brackets: Standard Deduction Rises to $33,200 for Couples, Child Tax Credit to $2,300. Here's What It Means for Floridians

The Internal Revenue Service on Nov. 5 released its inflation adjustments for tax year 2027, raising the standard deduction to $33,200 for married couples filing jointly and $16,600 for single filers, lifting the child tax credit to as much as $2,300 per child and pushing every income tax bracket threshold higher by roughly 3.2%. The changes, published in Revenue Procedure 2026-35, apply to income earned in 2027 and to returns filed in early 2028.

For Floridians, the federal numbers are the entire income tax story. Florida's constitution bars a personal state income tax, so there is no state bracket, deduction or credit to layer on top. Whatever the IRS sets for 2027 determines what a Florida worker, retiree or small business owner owes on wages, pensions and investment income.

What the IRS announced

The annual adjustments cover dozens of tax provisions and are meant to keep inflation from pushing taxpayers into higher brackets when their real income has not grown. The seven federal tax rates stay the same, ranging from 10% to 37%, but the income levels at which each rate begins have risen. Reports on the release put the 2027 adjustment at about 3.2%, compared with 2.7% for 2026.

The release also reflects the tax law President Donald Trump signed in July 2025, which made many provisions of the 2017 tax cuts permanent. Personal exemptions remain at $0, and the overall limit on itemized deductions remains eliminated, although filers in the top bracket still face a limit on the tax benefit they can get from itemizing, according to the IRS figures reported by News 6 in Orlando.

The 2027 tax brackets

The brackets below apply to taxable income, meaning income after the standard deduction or itemized deductions. Each rate applies only to the income that falls within its range.

For a married couple, the top of the 12% bracket rises by $3,250 from 2026, which means a household with steady income in 2027 will have more of it taxed at the lower rate than it would under this year's thresholds.

Standard deductions

Most taxpayers take the standard deduction rather than itemizing, which makes it the single most important number for many Florida households. The 2027 amounts are:

Because Florida has no state income tax, Floridians cannot deduct state income taxes on their federal returns. Homeowners who itemize can still deduct property taxes and other state and local taxes, subject to the federal cap on that deduction, which makes the comparison between itemizing and the higher standard deduction worth running each year.

Credits for families

The child tax credit rises to as much as $2,300 per qualifying child, up $100, with a refundable portion of up to $1,800, also up $100. The refundable part matters most for lower-income families, since it can be paid out even when a family owes little or no income tax.

The maximum earned income tax credit for workers with three or more qualifying children rises to $8,496, from $8,231. The adoption credit rises to $18,250, from $17,670, with up to $5,280 of it refundable.

Benefits, savings and estates

Workers with employer benefits will see several limits rise. Health flexible spending account contributions climb to $3,500, up $100, with up to $700 allowed to carry over if a plan permits. The monthly limit for qualified transportation and parking benefits rises to $350, up $10. The foreign earned income exclusion increases to $137,300, from $132,900.

For wealthier Floridians and the many retirees who move to the state partly for its tax climate, the estate and gift changes are significant. The basic exclusion amount for estates rises to $15.48 million, from $15 million, and the annual gift exclusion rises to $20,000 per recipient, from $19,000. The annual exclusion for gifts to a spouse who is not a U.S. citizen rises to $201,000, from $194,000. Florida has no state estate or inheritance tax, so the federal exclusion is the only one that applies to most Florida estates.

People with high-deductible health coverage tied to medical savings accounts will see new ranges as well. For self-only coverage, the deductible must fall between $3,000 and $4,550, with an out-of-pocket maximum of $6,050. For family coverage, the deductible range is $6,050 to $9,050, with an out-of-pocket maximum of $11,050.

Some figures did not move. The income range over which the Lifetime Learning Credit phases out stays at $80,000 to $90,000 for single filers and $160,000 to $180,000 for married couples filing jointly, which matters for Floridians taking college or job-training courses.

What it means for Florida retirees and businesses

Florida has one of the oldest populations in the country, and retirees drawing pensions, individual retirement account withdrawals and taxable Social Security benefits are taxed only at the federal level. The higher brackets and standard deduction mean the same income in 2027 will generally produce a slightly smaller federal bill than it would under 2026 rules. Under the 2025 tax law, taxpayers 65 and older can also claim an additional deduction of up to $6,000 each through 2028, subject to income limits.

Florida's small businesses also see higher limits. The Section 179 deduction for equipment purchases rises to $2.64 million, from $2.56 million, and the limit for qualifying sport utility vehicles rises to $33,100, from $32,000. The employer-provided child care credit rises to about $515,944, from $500,000, and the cap for eligible small businesses rises to about $619,132.

What's next

These figures do not affect the returns Floridians will file in early 2027, which cover 2026 income and use 2026 brackets. The 2027 numbers matter now mainly for planning: adjusting paycheck withholding, deciding how much to contribute to flexible spending accounts during open enrollment, timing gifts and estimating quarterly payments for the self-employed. The full list of adjusted provisions is in Revenue Procedure 2026-35, available on the IRS website.