For individuals, the top income tax rate for 2023 is 37%, except for long-term capital gains and qualified dividends (discussed below).
P.L. 115-97 reduced both the individual tax rates and the number of tax brackets. P.L. 115-97 sunsets after 2025 many individual tax provisions, including the lower rates and revised brackets, in order to comply with US Senate budget rules.
2023 income tax rates and brackets
Single taxpayers (1) |
Taxable income (USD) |
Tax rate |
0 to $11,000 |
10% |
$11,001 to $44,725 |
12% |
$44,726 to $95,375 |
22% |
$95,376 to $182,100 |
24% |
$182,101 to $231,250 |
32% |
$231,251 to $578,125 |
35% |
$578,126+ |
37% |
Married taxpayers filing jointly (1, 2) |
Taxable income (USD) |
Tax rate |
0 to $22,000 |
10% |
$22,001 to $89,450 |
12% |
$89,451 to $190,750 |
22% |
$190,751 to $364,200 |
24% |
$364,201 to $462,500 |
32% |
$462,501 to $693,750 |
35% |
$693,751+ |
37% |
Head-of-household taxpayers (1, 2) |
Taxable income (USD) |
Tax rate |
0 to $15,700 |
10% |
$15,701 to $59,850 |
12% |
$59,851 to $95,350 |
22% |
$95,351 to $182,100 |
24% |
$182,101 to $231,250 |
32% |
$231,251 to $578,100 |
35% |
$578,101+ |
37% |
Married taxpayers filing separately (1) |
Taxable income (USD) |
Tax rate |
0 to $11,000 |
10% |
$11,001 to $44,725 |
12% |
$44,726 to $95,375 |
22% |
$95,376 to $182,100 |
24% |
$182,101 to $231,250 |
32% |
$231,251 to $346,875 |
35% |
$346,876+ |
37% |
Notes
- The maximum federal income tax rate on ‘qualified dividends’ received from a domestic corporation is 20%. The maximum federal tax rate on capital gains is 20% for assets held for more than 12 months. The graduated rates of tax apply to capital gains from assets held for 12 months or less.
- Non-resident aliens may not take advantage of head of household status or joint return rates.
Alternative minimum tax (AMT)
In lieu of the tax computed using the above rates, the individual AMT may be imposed under a two-tier rate structure of 26% and 28%. For tax year 2022, the 28% tax rate applies to taxpayers with taxable incomes above USD 206,100 (USD 103,050 for married individuals filing separately). For tax year 2023, the 28% tax rate applies to taxpayers with taxable incomes above USD 220,700 (USD 110,350 for married individuals filing separately).
For 2022, the AMT exemption amount is USD 118,100 for married taxpayers filing a joint return (half this amount for married taxpayers filing a separate return) and USD 75,900 for all other taxpayers (other than estates and trusts), and the phase-out thresholds are USD 1,079,800 for married taxpayers filing a joint return and USD 539,900 for all other taxpayers (other than estates and trusts). For 2023, the AMT exemption amount is USD 126,500 for joint filers (half of this amount for married taxpayers filing a separate return), and USD 81,300 for all other taxpayers other than estates and trusts. The phase-out thresholds increase to USD 1,156,300 for joint filers and USD 578,150 for all other taxpayers other than estates and trusts.
The AMT is payable only to the extent it exceeds the regular net tax liability. The foreign tax credit is available for determining AMT liability to the extent of the foreign tax on the foreign-source AMT income (AMTI), subject to certain limitations.
AMTI generally is computed by starting with regular taxable income, adding tax preference deductions (claimed in the computation of regular taxable income), and making special adjustments to some of the tax items that were used to calculate taxable income. For example, the taxpayer must add back all state and local income taxes deducted in computing regular taxable income.
For non-resident aliens with a net gain from the sale of US real property interests, the AMT is calculated on the lesser of AMTI (before the exemption) or the net gain from the sale of the US real property interest.
Medicare contribution tax
State and local income taxes