T26-0150Repeal Changes to Individual Income Tax Rates and Brackets Enacted by 2025 Budget Reconciliation Act

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Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0526-1)

Notes: Baseline is current law. Under current law, statutory individual income tax rates are 10, 12, 22, 24, 32, 35, and 37 percent. For married couples filing jointly (MFJ), the projected taxable income thresholds for those rates in 2027 are: $0; $25,400; $103,350; $216,800; $413,900; $525,600; and $788,400. For single filers, the thresholds for the first six rates are half those for MFJ and the threshold for the top rate is $657,025. For heads of household, the thresholds for the bottom three rates are: $0; $18,150; and $69,150. The thresholds for the fourth through sixth rates are half those for MFJ and the threshold for the top rate is $657,000. All thresholds for married individuals filing a separate return are half those for MFJ. Proposal would be effective 01/01/27. Proposal would not change individual alternative minimum tax (AMT) rates or preferential rates on qualified dividends and long-term capital gains. Estimate assumes a fiscal split of 70-30 (70 percent of calendar year revenue is received by the Treasury in the current fiscal year and 30 percent in the following fiscal year). The actual effect on receipts could differ. Estimate includes microdynamic behavioral responses. Under the proposal, the rates would be 10, 15, 25, 28, 33, 35, and 39.6 percent. For married couples filing jointly (MFJ), the projected taxable income thresholds for those rates in 2027 would be: $0; $24,950; $101,400; $204,550; $311,700; $556,600; and $628,750. For single filers, the thresholds for the first three rates would be half those for MFJ and the threshold for the top four rates would be: $122,750; $256,000; $556,600, and $558,850. For heads of household, the thresholds would be: $0; $17,800; $67,900; $175,300; $283,850; $556,600; and $593,800. All thresholds for married individuals filing a separate return would be half those for MFJ.