How the 2026 Midterm Elections Affect Your 2027 Taxes

The November 3, 2026 election changed who controls Congress. It does not change your tax numbers for 2027. The IRS already set the 2027 brackets, standard deduction and credits on November 5, 2026. Any new tax law still needs to pass both the House and the Senate and be signed by the President. Here is what that means for you.

Last updated November 6, 2026. Some election results were still being counted when we wrote this. We will update this page as things change.

Looking for the numbers? See the official 2027 tax amounts on our Tax Information page.

What happened in the election

News outlets including CBS News and CNN project that Democrats won majorities in both the U.S. House and the U.S. Senate. A few races were still uncalled as of November 5. The new Congress starts in January 2027. The current Congress keeps working until January 3, 2027.

President Trump stays in office through January 2029. That matters for taxes. A bill only becomes law if the President signs it, or if two-thirds of both chambers vote to override a veto. Tax experts at Plante Moran expect this split government to make big tax changes unlikely before 2029.

Your 2027 tax numbers are already set

The IRS adjusts dozens of tax amounts for inflation every year. It released the 2027 amounts on November 5, 2026, in Revenue Procedure 2026-35. The election does not change them. For tax year 2027 (returns you file in 2028):

• Standard deduction: $16,600 single, $33,200 married filing jointly, $24,925 head of household
• 10% bracket: taxable income up to $12,800 single ($25,600 married filing jointly)
• Child Tax Credit: up to $2,300 per child, with up to $1,800 refundable
• Earned Income Tax Credit: up to $8,496 with three or more children
• Annual gift exclusion: $20,000
• Section 179 expensing for businesses: up to $2,640,000

Your 2026 return, which you file in early 2027, is also not affected. It follows the rules already in place for 2026.

What about no tax on tips, overtime and the senior deduction?

These deductions came from the 2025 tax law. They include the deduction for tips (up to $25,000), the deduction for overtime pay (up to $12,500, or $25,000 if married filing jointly), the $6,000 senior deduction and the deduction for interest on a new U.S.-built car loan. Under current law, they run through the end of 2028.

To take them away early, Congress would have to pass a new law and the President would have to sign it. Because the President backed these deductions, that is unlikely. The bigger question is what happens after 2028, when they are set to end. Expect that to be a major issue in the 2028 election.

What Congress could still take up

Smaller tax bills that both parties support have the best chance. Here is what tax experts are watching:

• Marketplace health insurance help. The extra premium tax credit for Marketplace (Healthcare.gov) plans ended after 2025. Democrats have pushed to bring it back. Any deal would need the President’s signature.
• Expired business credits. The Work Opportunity Tax Credit, which helps employers who hire from certain groups, partly lapsed. Congress could renew it, possibly before the current session ends.
• IRS service bills. A bill on IRS taxpayer service and disputes (the TAS Act) has support from both parties.
• Higher taxes on the wealthy. Sen. Ron Wyden, expected to chair the Senate Finance Committee, said the committee will focus on a billionaire tax, health care and tariffs. Experts expect the President to veto proposals like these, so they are unlikely to become law before 2029.

Nothing on this list is law yet. We will tell you if anything passes that affects your return.

What Arizona voters decided on taxes

Proposition 316 passed. It caps city and town sales taxes on groceries at 2%. Any new or higher local grocery tax now needs voter approval. Changes cannot take effect before June 30, 2027.

Proposition 141 was too close to call as of November 5. It would ban taxes or fees based on how many miles you drive. We will update this post when the result is final.

Arizona’s state income tax stays a flat 2.5%. See our Arizona tax guide for credits and deadlines.

What you should do now

• Plan with today’s rules. The 2027 numbers are set, and the new deductions run through 2028.
• Keep records for the new deductions. Save tip records, pay stubs that show overtime, and car loan statements.
• Marketplace shoppers: check your 2027 premium during open enrollment. Do not count on extra help unless Congress passes it.
• Business owners: keep planning around 100% bonus depreciation and Section 179. Experts expect the 2025 business tax breaks to stay in place.

About the author

Sources

• IRS: Tax inflation adjustments for tax year 2027 (IR-2026-133, Rev. Proc. 2026-35), November 5, 2026
• CBS News: 2026 midterm election results, November 2026
• CNN: 2026 midterm election results, November 5, 2026
• Plante Moran: Federal tax outlook after the 2026 midterm elections, November 4, 2026
• Thomson Reuters: Tax pros gauge midterm elections’ impact on policy outlook, October 2026
• CNBC: Senate Finance focus after the midterms, November 4, 2026
• KTAR: 2026 Arizona ballot measure results, November 2026
• Kiplinger: 2026 midterm results deliver a split verdict on taxes

This article is general information, not tax advice for your situation. Tax rules can change, so talk with a tax professional before you file.