Three significant tax and benefits changes took effect or were announced during Q2 2026. Whether you run a business, manage employee benefits, or are focused on your own financial planning, at least one of these updates is likely relevant to you. Here is what changed and what you may need to do about it.
2027 HSA and Health Plan Limits Are Now Set
On May 29, 2026, the IRS published Revenue Procedure 2026-24, establishing the benefit plan limits that will apply for the 2027 plan year. Open enrollment decisions are typically made well before year-end, so now is the right time to incorporate these numbers into your planning conversations with your HR team, benefits broker, or CPA.
HSA contribution limits for 2027:
- Self-only coverage: $4,500 (up $100 from 2026)
- Family coverage: $9,000 (up $250 from 2026)
- Catch-up contributions for individuals age 55 or older: $1,000 (unchanged)
High-deductible health plan (HDHP) minimum deductibles for 2027:
- Self-only coverage: $1,750 (up $50 from 2026)
- Family coverage: $3,500 (up $100 from 2026)
HDHP maximum out-of-pocket limits for 2027:
- Self-only coverage: $8,700 (up $200 from 2026)
- Family coverage: $17,400 (up $400 from 2026)
ACA out-of-pocket maximums for non-grandfathered plans covering in-network essential health benefits:
- Self-only coverage: $12,000 (up $1,400 from 2026)
- Family coverage: $24,000 (up $2,800 from 2026)
Note that the ACA out-of-pocket maximums apply specifically to in-network essential health benefits, while HDHP out-of-pocket limits apply more broadly. Excepted benefit health reimbursement arrangements (EBHRAs) retain a $2,250 annual maximum for 2027.
Source: IRS Revenue Procedure 2026-24
IRS Increases Standard Mileage Rate to 76 Cents Per Mile
In a move that affects businesses, self-employed individuals, and employees who drive personal vehicles for work, the IRS raised the standard business mileage reimbursement rate from 72.5 cents to 76 cents per mile — an increase of 3.5 cents. The rate change was announced July 13, 2026, and is retroactively effective for all business miles driven on or after July 1, 2026.
The standard mileage rate is not mandatory for private employers, but it is the most widely used benchmark for employee mileage reimbursement because it is administratively simple and IRS-recognized. If your business uses this rate and your employees submitted mileage for July, those reimbursements need to reflect the higher rate for miles driven on or after the 1st.
Practically speaking, this means two rates apply to July mileage logs: 72.5 cents for miles driven before July 1, and 76 cents for miles driven from July 1 forward. If you use mileage tracking software or a payroll provider, contact them to confirm the rate is updated.
Source: IRS Raises Standard Mileage Rates for Remainder of 2026 — Journal of Accountancy
Federal Scholarship Tax Credit: Alabama Is Participating
The One Big Beautiful Bill introduced a new Federal Scholarship Tax Credit that allows eligible taxpayers to claim a federal income tax credit of up to $1,700 for qualified contributions to Scholarship Granting Organizations (SGOs). SGOs use those contributions to fund private elementary and secondary school scholarships for eligible students.
State participation is voluntary, and the IRS has confirmed that 27 states — including Alabama — have elected to join the program. That means Alabama taxpayers who contribute to an IRS-approved SGO operating in the state may qualify for this credit on their federal return.
A few important details to keep in mind:
- The credit applies only to contributions made to an approved SGO in a participating state. The IRS maintains an updated list of approved organizations.
- This federal credit is separate from Alabama’s existing state-level scholarship tax credit programs. How the two interact — and whether your combined credits are limited — is worth reviewing with your CPA before making a contribution.
- The IRS will continue to update its official list as additional states and organizations complete the required election process. More states may be added as the year progresses.
Source: More Than Half the U.S. States Signed Up to Participate in the Federal Scholarship Tax Credit Program — IRS Newsroom
What You Should Do Now
These three changes each carry their own timing considerations. The 2027 HSA and health plan limits affect open enrollment decisions being made in the coming months. The mileage rate increase is retroactive to July 1, meaning any July reimbursements already processed at the old rate may need to be corrected. And the scholarship credit requires a qualifying contribution to an approved organization before year-end to generate a credit on your 2026 return.
Peters Bandura CPA monitors IRS guidance and legislative changes throughout the year so our clients are prepared — not caught off guard — when these updates land. If you have questions about how any of these changes apply to your business or personal tax situation, we are glad to help.
Have questions about how these mid-2026 changes affect your business or personal tax plan? Peters Bandura CPA is here to help. Visit www.petersbandura.com or call us to schedule a conversation.