What specific MAGI changes did the IRS announce for 2026 and when do they take effect?
Executive summary
The IRS’s 2026 announcements adjusted several MAGI-based income thresholds through inflation indexing and rule changes tied to the One Big Beautiful Bill, with most changes applying to tax year 2026 (returns filed in 2027) and some provisions effective January 1, 2026 or retroactive to 2025; specific MAGI phaseout ranges were raised for retirement/IRA limits and for certain new OBBBA deductions, while at least one longstanding MAGI threshold (the Lifetime Learning Credit) was left unchanged since 2020 [1] [2] [3] [4].
1. What the IRS officially changed for 2026: retirement- and IRA-related MAGI ranges rose
The IRS released inflation-adjusted retirement-plan contribution limits and related MAGI phaseout ranges in Notice 2025–67, increasing the phaseout range for single and head-of-household taxpayers who participate in an employer plan by $2,000 to $81,000–$91,000 for 2026, and raising the MAGI ranges that determine deductibility of traditional IRA contributions and Roth IRA eligibility for 2026 [2] [3]. SD Mayer and Miller Kaplan summarize the IRS guidance showing higher 2026 MAGI phaseouts for Roth eligibility — for example, single/head‑of‑household phaseouts increased to roughly $153,000–$168,000 and married‑filing‑jointly ranges to about $242,000–$252,000 — meaning more filers fall within partial‑eligibility windows in 2026 [3] [2].
2. What the IRS explicitly left unchanged: the Lifetime Learning Credit MAGI cap
The IRS noted that the MAGI amount used to phase out the Lifetime Learning Credit has not been adjusted for inflation for tax years beginning after Dec. 31, 2020; the credit still phases out for taxpayers with MAGI between $80,000 and $90,000 ($160,000 and $180,000 for joint returns) as of the IRS 2026 inflation adjustments release [1]. This is a direct IRS statement that the Lifetime Learning Credit’s MAGI thresholds remain nominally unchanged going into tax year 2026 [1].
3. MAGI thresholds created by the One Big Beautiful Bill and IRS timing
The One Big Beautiful Bill (OBBBA) introduced new or expanded benefits that use MAGI thresholds, and the IRS and tax providers tied many of these changes to 2026 effective dates: auto‑loan interest and certain tip‑related deductions introduced under OBBBA have MAGI phaseout ranges that begin at about $100,000 for single filers ($200,000 joint) and fully phase out at $150,000 ($250,000 joint) for the auto interest deduction, and tips‑deduction phaseouts beginning at $150,000 ($300,000 joint) — these OBBBA provisions are described as applying for tax years 2025–2028 in provider coverage, but most OBBBA changes take effect on January 1, 2026, with some retroactive elements for 2025 returns filed in 2026 [5] [6] [4] [7].
4. Effective dates and filing-year nuance: 2026 vs. 2025 returns
The IRS’s formal inflation‑adjustment release covers tax year 2026, which generally means the new MAGI ranges apply to income earned in 2026 and returns filed in 2027; Notice 2025–67 and other IRS guidance specify 2026 limits [1] [2]. Separately, many OBBBA provisions were written to take effect Jan. 1, 2026, but certain provisions and temporary benefits can affect 2025 tax returns filed in the 2026 filing season — tax software and tax-help sites therefore flagged that taxpayers must watch for both 2025‑retroactive and 2026‑effective MAGI thresholds when preparing 2026 filings [4] [7].
5. Practical implications and open limits in the public record
Raising MAGI phaseout ranges for retirement and IRA items means more taxpayers will be eligible for partial deductions or Roth contributions in 2026, while the static Lifetime Learning Credit caps preserve a tighter eligibility window [2] [3] [1]. The reporting reviewed does not provide a single consolidated IRS table of every MAGI threshold changed in 2026; the changes must be read across the IRS inflation‑adjustment release, retirement‑limit notices, and OBBBA guidance and summaries from tax services to assemble the full list [1] [2] [4]. Where producers and tax sites differ in phrasing — for example, whether an OBBBA deduction applies to 2025 returns or only starting 2026 — those differences reflect how some OBBBA provisions are retroactive while most take effect Jan. 1, 2026 [4] [7].