Standard deduction for taxable years 2026 and 2027 increased by tariff rebate amount

(a) In general Section 63(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (8) Special rules for taxable years 2026 and 2027 (A) Increase in standard deduction In the case of a taxable year beginning after December 31, 2025, and before January 1, 2028, the standard deduction shall be increased by the tariff rebate amount. (B) Tariff rebate amount For purposes of this paragraph, the tariff rebate amount is— (i) $4,000 in the case of a joint return or a surviving spouse (as defined in section 2(a)), (ii) $3,000 in the case of a head of household (as defined in section 2(b)), or (iii) $2,000 in any other case.. (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2025.