2026 Tax Changes: What Central PA Families and Business Owners Need to Know
The One Big Beautiful Bill Act (OBBBA) has permanently changed the tax landscape for 2026. Discover how the new $12,000 Senior Deduction and permanent QBI benefits impact your wealth planning in Harrisburg.
The One Big Beautiful Bill Act (OBBBA) has fundamentally reshaped the federal tax code for 2026. While many of the 2017 tax cuts were set to expire, this new legislation makes several key provisions permanent and introduces brand-new incentives for families. PAC Financial, your local advisory team in Harrisburg, Pennsylvania, is here to help you run the right plays under these new rules.
Here are the changes hitting your wallet in 2026.
For Individuals and Families
Permanent Lower Brackets: The seven-bracket structure (10% to 37%) is now permanent. This prevents a massive "tax cliff" that would have spiked rates for nearly every worker in Central PA.
2026 Standard Deduction: The deduction has been boosted for inflation. For 2026, it is $16,100 for single filers and $32,200 for married couples. This simplifies filing for most families in Dauphin and Cumberland counties.
The New "Enhanced Senior Deduction": This is a major win for our retired clients. Taxpayers age 65 and older can now claim an additional $6,000 deduction ($12,000 for couples). When combined with the PA state tax exemption for retirees, a married couple over 65 could shield nearly $47,500 of income from federal tax before paying a single cent.
No Tax on Tips & Overtime: Starting in 2026, the IRS has implemented new procedures for two major deductions. Service workers can deduct up to $25,000 in tip income. Additionally, hourly workers can deduct the "premium" portion of their overtime pay (the "half" in time-and-a-half) up to $12,500 annually.
For Parents and Grandparents
The "Trump Account" Pilot: Every U.S. child born between 2025 and 2028 is eligible for a $1,000 government-seeded savings account. These grow tax-deferred. Parents and grandparents can contribute up to $5,000 per year, and funds can be used for education, a first home, or retirement when the child turns 18.
Child Tax Credit: The credit is now $2,200 per child. For a family in Mechanicsburg with three kids, that’s a $6,600 direct reduction in your tax bill.
For Small Business Owners
Section 199A is Permanent: The 20% Qualified Business Income (QBI) deduction for pass-through entities (LLCs, S-Corps) is no longer expiring. If you own a business in Camp Hill or Hershey, you can continue to count on this lower effective tax rate indefinitely. This is especially vital as we prepare for the possibility of new state-level mandates like the Keystone Saves program.
100% Bonus Depreciation: The OBBBA restored the ability to write off 100% of the cost of equipment and vehicles in the year of purchase. If your business needs a new truck or machinery in 2026, you don't have to wait years to see the tax benefit.
Talk to PAC Financial
Don't leave money on the table. Call PAC Financial at (717) 564-6400. Whether you’re a business owner in Carlisle or a family in Harrisburg, we’ll help you navigate the 2026 tax landscape and build a plan that keeps more of what you earn.
Compliance Notice
This information is for educational purposes only. OBBBA provisions are subject to IRS phase-out limits. Consult a tax professional. PAC Financial is a financial advisory firm serving Central Pennsylvania. Securities and advisory services offered through Osaic Wealth, Inc. Member FINRA/SIPC.