Tax Update February 2026: What Changed This Week and How It Affects Your Refund

New Haven, CT – February 13, 2026 – The 2026 tax filing season is officially underway, and several significant changes are now in effect that will directly impact the size of your refund. Whether you're filing as an individual, managing a family return, or claiming business deductions, understanding these updates can mean hundreds: or even thousands: of dollars in additional tax savings.

Here's what changed this week and what you need to know before filing your return.

Standard Deduction Increases: Your Refund Just Got Bigger!

The IRS has implemented substantial increases to the standard deduction for tax year 2026. This change alone will reduce taxable income for millions of taxpayers across the country.

New 2026 Standard Deduction Amounts:

• Single filers: $15,750 (increased from $12,500)
• Married filing jointly: $31,500 (increased from $24,000)
• Head of household: $23,625 (increased from $18,000)

These increases translate to real savings. Single taxpayers can expect tax cuts ranging from $75 to $278, while married couples filing jointly may see reductions of $150 to $555, depending on their tax bracket.

Additional Deductions for Seniors and Individuals with Disabilities:

If you're age 65 or older, or if you're blind, claim the additional standard deduction:

• Single filers and heads of household: Additional $2,000
• Married taxpayers: Additional $1,600 per qualifying spouse

Action step: Review your filing status and age to determine which standard deduction amount applies to your situation. In most cases, the increased standard deduction eliminates the need to itemize.

New Senior Deduction: An Average of $1,000 in Savings

A newly implemented deduction specifically for taxpayers age 65 and older provides significant tax relief. According to the Tax Policy Center, approximately 24 million taxpayers will claim this deduction in 2026, with average savings of around $1,000.

Eligibility Requirements:

• Must be age 65 or older by December 31, 2025
• Available regardless of whether you itemize or take the standard deduction
• Applies to both single and joint filers

This deduction works in addition to the increased standard deduction, creating a substantial combined benefit for senior taxpayers.

Child Tax Credit Expansion: $200 More Per Child

The Child Tax Credit (CTC) has increased to $2,200 per qualifying child for the 2026 tax year. This represents an additional $200 per child compared to previous years.

Qualifying Criteria:

• Child must be under age 17 at the end of 2025
• Child must be claimed as a dependent on your return
• Income phase-out limits apply

For a family with three qualifying children, this increase alone can result in $600 additional tax savings. The credit is partially refundable, meaning you may receive money back even if you owe no taxes.

Action step: Gather Social Security numbers and relationship documentation for all qualifying children before filing. Missing or incorrect information can delay processing and reduce your refund amount.

SALT Deduction Cap Increases to $40,400

The state and local tax (SALT) deduction cap has been raised from $10,000 to $40,400 for 2026. This change primarily benefits taxpayers in high-tax states who itemize deductions.

What This Means for New Haven Residents:

Connecticut residents who pay substantial state income taxes and property taxes can now deduct significantly more on their federal returns. However, phase-out provisions begin at modified adjusted gross income (MAGI) of $505,000.

To maximize this deduction:

• Add up your state income taxes paid in 2025
• Include property taxes paid on your primary residence
• Include property taxes on additional properties
• Compare the total to the standard deduction to determine if itemizing makes sense

Warning: If your combined SALT deductions plus other itemized deductions (mortgage interest, charitable contributions) don't exceed the standard deduction, itemizing may not benefit you.

Charitable Giving Deduction for Non-Itemizers

Beginning with the 2026 tax year, taxpayers who take the standard deduction can now deduct cash charitable contributions up to:

• $1,000 for single filers
• $2,000 for joint filers

This "above-the-line" deduction allows you to reduce taxable income without itemizing, effectively combining the benefits of the increased standard deduction with charitable giving incentives.

Qualifying Contributions:

• Must be cash donations (checks, credit cards, electronic transfers)
• Must be made to qualified 501(c)(3) organizations
• Must be properly documented with receipts or bank records

Action step: Review your 2025 charitable contributions and ensure you have written acknowledgment from organizations for any donation over $250. Missing documentation can disqualify the deduction if audited.

Enhanced Dependent Care Benefits

The dependent care flexible spending account (FSA) limit has increased from $5,000 to $7,500 annually. Additionally, the child and dependent care tax credit maximum rate increased from 35% to 50%.

What This Means for Working Parents:

If you pay for childcare, preschool, before/after school programs, or adult dependent care, you can now set aside more pre-tax dollars or claim a larger credit.

Compare both options:

1. Dependent Care FSA: Contribute up to $7,500 pre-tax through your employer
2. Child and Dependent Care Credit: Claim up to 50% of qualifying expenses (up to $3,000 for one dependent, $6,000 for two or more)

In most cases, the FSA provides greater savings, but the credit may benefit families with lower incomes or those whose employers don't offer FSAs.

How These Changes Affect Your Refund Timeline

The IRS has confirmed that standard refund processing times remain 21 days for electronic filing with direct deposit. However, returns claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) are subject to mandatory holds until mid-February.

Refund Processing Checklist:

• File electronically for fastest processing
• Choose direct deposit for quickest refund receipt
• Double-check Social Security numbers and account information
• Verify all documentation for credits and deductions
• Respond promptly to any IRS correspondence

Missing information or errors can delay your refund by 6-8 weeks or longer.

What You Should Do Next

Review your 2025 tax documents and compare your situation to these new provisions. Many New Haven residents will benefit from multiple changes simultaneously: such as the increased standard deduction combined with the expanded child tax credit.

If your tax situation has increased in complexity, or if you're uncertain which deductions and credits apply to your circumstances, professional tax preparation can ensure you maximize your refund while remaining compliant with all IRS requirements.

At Jose's Tax Service, we stay current on every tax law change and update to ensure our clients receive every dollar they're entitled to. Our concierge tax preparation service includes comprehensive review of all available deductions, credits, and strategies to maximize your refund.

Key Deadlines:

• April 15, 2026: Federal tax return filing deadline
• October 15, 2026: Extended filing deadline (if extension filed by April 15)

Don't leave money on the table. These 2026 tax changes represent real savings: but only if you claim them correctly.

Categories: News, Tax Planning