The Internal Revenue Service has published its tax inflation adjustments for 2027, and two household figures stand out. The maximum child tax credit rises to $2,300, and the annual gift tax exclusion rises to $20,000 for each person who receives a gift.
The adjustments cover almost 70 provisions and were announced on Nov. 5, 2026, in IRS release IR-2026-133. They generally apply to tax returns filed in 2028.
The $2,300 Child Tax Credit
For 2027 the maximum child tax credit is $2,300, up $100 from the previous year, according to the IRS announcement. Up to $1,800 of it is refundable, also up $100. The refundable part matters for families that owe little tax, because it can be paid out even when it exceeds the tax bill.
The IRS describes the rules on its child tax credit page. A qualifying child must be under age 17 at the end of the year, must not provide more than half of his or her own support, and must have lived with the taxpayer for more than half the year. The taxpayer, a spouse filing jointly and each child need a Social Security number valid for employment. For the current tax year the page lists $2,200 per child and up to $1,700 refundable, which matches the $100 increases in the 2027 figures.
The full credit is available at incomes of $200,000 or less, or $400,000 for joint filers, and higher incomes may receive a partial credit. A separate credit for other dependents is worth up to $500 per person. Families paying down balances before the new year can compare ways to pay off credit card debt. For families watching grocery costs, a look at things that are actually getting cheaper puts the credit in context.
The $20,000 Gift Tax Exclusion
The annual gift tax exclusion rises to $20,000 for 2027, from $19,000, the IRS says. The exclusion applies to each person who receives a gift, so a donor can give $20,000 to as many people as he or she wishes in a year without any of it counting as a taxable gift.
The IRS explains in its gift tax questions page that spouses who give jointly owned property each get the exclusion, which was $38,000 per recipient combined in 2026. Applying the same rule to the new figure gives $40,000. The page also says that tuition or medical expenses paid for someone are generally not taxable gifts, and that the donor is generally responsible for any gift tax.
The IRS announcement lists a separate $201,000 annual exclusion for gifts to a spouse who is not a citizen, up from $194,000. The basic estate tax exclusion for people who die in 2027 rises to $15,480,000, from $15,000,000. Families planning holiday or tuition gifts may find a roundup of products people overpay for a useful companion.
The $8,496 Earned Income Tax Credit
The earned income tax credit is for low- and moderate-income workers, and its size depends on income and on the number of children. For 2027 the maximum credit is $8,496 for taxpayers with three or more qualifying children, up from $8,231, according to the IRS. The agency’s full revenue procedure has a table for smaller families. The credit has a long history: Wikipedia’s article on the credit says it was enacted in 1975 as part of the Tax Reduction Act and signed by President Gerald Ford, and that it is mainly used to promote and support work.
The IRS credit page says a worker can use its EITC Assistant tool to check eligibility. It also says that, by law, refunds for filers who claim the credit cannot be issued until mid-February, and that starting with tax year 2026 claimants must complete Schedule 3-A. Households that rely on the credit can plan around that date. A story on habits of people who rarely run short of money covers one way to smooth a tight stretch, and the everyday pressures that put life plans on hold shows why small changes in credits can matter at the kitchen table.
Other 2027 Figures in the Release
Several other numbers will shape household budgets. The standard deduction for 2027 is $33,200 for married couples filing jointly, up $1,000, and $16,600 for single filers and married people filing separately. For heads of household it is $24,925.
The top federal rate of 37 percent applies above $661,375 for single filers and above $793,650 for married couples filing jointly. The 22 percent bracket starts above $52,025 for single filers, and the 10 percent bracket covers incomes up to $12,800. Personal exemptions remain at $0.
Other items carry dollar amounts too. The maximum adoption credit is $18,250, with $5,280 refundable. The health flexible spending arrangement limit is $3,500, up $100, with a carryover limit of $700. The foreign earned income exclusion is $137,300.
What Changes and What Does Not
The new figures do not change what taxpayers owe for this year. They apply to income earned in 2027, and the returns for that year are filed in 2028. For this year’s returns, the earlier numbers still apply, including the $2,200 child tax credit and the $19,000 gift tax exclusion.
The IRS also notes that some items are not indexed for inflation. The Lifetime Learning Credit phase-out ranges stay at $80,000 to $90,000, or $160,000 to $180,000 for joint returns. Families with questions about a specific credit can find the detailed tables in the agency’s Revenue Procedure 2026-35, which the announcement identifies as the source of the adjustments.
Gift givers and parents do not need to do anything now. The numbers are a planning tool, since the exclusion and the credits determine how much can be shared or claimed once the year begins. Anyone with a large gift or a complicated return can ask a tax professional how the new limits apply to a specific case.
This article was produced with AI assistance and edited for accuracy against the sources linked above.
