Comparison of Key Provisions in the 2025 Tax Legislation
Track the status of the federal tax proposals below to understand how the new legislation will impact you and your business.
Individual income tax rates (Sec. 1)
Current Law:
Individual tax rates include: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. These rates expire after 2025 and revert to pre-TCJA rates.
Trump Proposal:
The current rates would be made permanent; the individual income tax would be replaced by tariffs. The 39.6% rate would be reinstated on incomes over $1 million. 39.6% rate reinstated on incomes over $1 million.
House Bill Passed May 22:
Extends the TCJA changes and provides an additional year of inflation adjustments for all brackets except the 35% and 37% brackets, effective after 2025.
Senate Bill Passed July 1:
Same as House but provides the additional year of inflation adjustments only to the 10% and 12% brackets.
Capital gains rate (Sec. 1(h))
Current Law:
Current capital gains rates:
Short-term capital gains are taxed at ordinary rates;
Long-term capital gains rates (without net investment income tax):
- 0% for taxpayers with income up to $94,050 (MFJ), $47,025 (S), and $63,000 (HOH)
- 15% for taxpayers with income between $94,051 to $583,750 (MFJ), $47,026 and $518,900 (S), and $63,001 and $551,350 (HOH)
- 20% for taxpayers with income over $583,750 (MFJ), $518,900 (S), and $551,350 (HOH)
Collectibles: 28%
Rate thresholds are scheduled to change in 2026.
Trump Proposal:
The top LTCG rate would be reduced to 15% and bracket thresholds made permanent. Cryptocurrency would be exempt from capital gains tax.
House Bill Passed May 22:
No change except making the current bracket thresholds permanent.
Senate Bill Passed July 1:
Same as House.
Standard deduction (Sec. 63)
Current Law:
For 2025:
- $30,000 (MFJ),
- $15,000 (S/MFS),
- $22,500 (HOH).
Increased amounts expire after 2025.
Trump Proposal:
The Trump proposal would increase these amounts and make the increases permanent.
House Bill Passed May 22:
Makes permanent the increased standard deduction under TCJA, with an additional year of inflation adjustment, and temporarily increases the deduction for four years from 2025 through 2029 by $2,000 (MFJ), $1,500 (HOH), and $1,000 (S/MFS).
Senate Bill Passed July 1:
Permanently increases the standard deduction beginning in 2025 to $32,000 (MFJ), $15,750 (S), and $23,625 (HOH).
Personal exemptions (Sec. 151)
Current Law:
Personal exemptions are at zero through 2025.
Trump Proposal:
Personal exemptions would remain at zero permanently.
House Bill Passed May 22:
Permanently repeals personal exemptions.
Senate Bill Passed July 1:
Same as House, except a new personal exemption is created for seniors to replace the House deduction, discussed below.
Child tax credit (Sec. 24)
Current Law:
Maximum child tax credit (CTC) is $2,000 per qualifying child; up to $1,700 per child can be refundable. CTC is reduced by $50 for each $1,000 of income above the following levels:
- $200,000 of modified adjusted gross income (MAGI) for single filers
- $400,000 MAGI for joint filers. CTC reverts to $1,000 per qualifying child after 2025, with a higher refund earned income threshold and lower phaseout levels.
Trump Proposal:
Vice President JD Vance suggested increasing the CTC to $5,000 per child regardless of income level.
House Bill Passed May 22:
Increases the CTC to $2,500 per child from 2025 through 2028. The CTC would revert to $2,000 in 2028, adjusted for inflation. The refundable portion of the CTC would be made permanent.
Senate Bill Passed July 1:
Permanently increases the CTC to $2,200 beginning in 2025, indexing it to inflation thereafter. Makes permanent the refundable portion of the CTC.
Qualified business income deduction (Sec. 199A)
Current Law:
Individuals, fiduciaries, and trust/estate beneficiaries may deduct 20% of qualified business income from a partnership, S corporation, or sole proprietorship (20% of total qualified real estate investment trust dividends and publicly traded partnership income are also eligible). There is no cap on the deduction; however, the deduction is subject to income limitations. In 2024, the deduction phases out for incomes between $191,950 and $241,950 (single filers) and between $383,900 and $483,900 (joint returns) in 2024. Provision expires after 2025.
Trump Proposal:
The current rule would be made permanent.
House Bill Passed May 22:
Makes the deduction permanent at an increased 23% rate with a change to the phaseout rules for nonqualified income.
Extends deduction to business development companies, and other modifications effective after 2025.
Senate Bill Passed July 1:
Makes deduction permanent at 20% rate with slightly different change to the phaseout rules for nonqualified income than the House.
Creates new minimum $400 deduction for taxpayers with at least $1,000 of qualified income, with both figures indexed to inflation.
Alternative minimum tax (AMT) exemptions and phaseouts (Sec. 55)
Current Law:
The TCJA increased exemption from 2018 through 2025. Exemptions in 2025:
- $137,000 (MFJ)
- $88,1000 (S/HOH)
- $68,500 (MFS)
Phaseout of AMT:
- $1,252,700 (MFJ)
- $636,350 (S/HOH/MFS)
Trump Proposal:
The increased exemption amounts would be made permanent.
House Bill Passed May 22:
Generally makes permanent the TCJA AMT thresholds permanent, but only after resetting the inflation adjustments back to the 2018 level, effectively reducing the thresholds and reindexing them to inflation after 2026. The amounts in 2026 would be reduced to:
- $109,400 (MFJ)
- $70,300 (S/HOH)
- $54,700 (MFS)
Phaseout of AMT:
- $1,000,000 (MFJ)
- $500,000 (S/HOH/MFS)
Senate Bill Passed July 1:
Same as House but only the phaseout thresholds would be reset to the 2018 level, not the exemption amounts, and the phaseout of the exemptions based on the amount of income exceeding the thresholds would be slowed by half.
Deduction for qualified residence interest (Sec. 163(h))
Current Law:
For indebtedness incurred after December 31, 2017, and before January 1, 2026, taxpayers may treat no more than $750,000 ($375,000 if MFS) as acquisition indebtedness for purposes of the mortgage interest itemized deduction. For indebtedness incurred on or before December 31, 2017, and for all acquisition indebtedness on or after January 1, 2026, the indebtedness amounts are $1 million ($500,000 if married filing separately).
Trump Proposal:
The lower indebtedness amounts would be made permanent.
House Bill Passed May 22:
Makes permanent the lower cap on indebtedness.
Senate Bill Passed July 1:
Same as House but treats certain mortgage insurance premiums as qualified interest.
Casualty loss deduction (Sec. 165(c))
Current Law:
Personal casualty losses incurred after December 31, 2017, and before January 1, 2026, are generally not deductible under the TCJA (except to the extent of personal casualty gains) unless they are disaster losses, which remain deductible under the TCJA to the extent the loss exceeds 10% of AGI.
Trump Proposal:
The casualty loss limitations would be made permanent.
House Bill Passed May 22:
Makes the casualty loss limitations under the TCJA permanent.
Senate Bill Passed July 1:
Same as House but extends the exception for disaster loss treatment to state-declared disasters.
Other itemized deductions (Sec. 63)
Current Law:
From 2018 through 2025:
- Medical/dental expenses if they exceed 7.5% of AGI
- Charitable contributions generally up to 60% of AGI
- Misc. itemized deductions suspended
Trump Proposal:
Itemized deduction limitations would be made permanent.
House Bill Passed May 22:
Makes limits on itemized deduction limits permanent.
Senate Bill Passed July 1:
Similar to House but allows an itemized deduction for certain educator expenses.
Pease limitation on itemized deduction
Current Law:
The Pease limit on itemized deductions is suspended under the TCJA for 2018 to 2025.
Trump Proposal:
The repeal of the limitation would be made permanent.
House Bill Passed May 22:
Makes the repeal of the Pease limitation permanent but would create a new limitation in its place. The new limit would generally cap the value of itemized deductions so that the maximum benefit would be equivalent to reducing taxable income in the 32% bracket rather than in the 35% and 37% brackets.
Senate Bill Passed July 1:
Same as House but the new limit would only cap the value at the 35% bracket rather than the 32% bracket.
Charitable deduction (Sec. 170)
Current Law:
The individual deduction for charitable contributions is available only for taxpayers that itemize their deductions. For 2021, a temporary provision allows a charitable deduction of up to $300 for non-itemizing taxpayers.
Trump Proposal:
No specific proposal.
House Bill Passed May 22:
Reinstates a deduction for charitable contributions for taxpayers that do not itemize of up to $300 (MFJ) or $150 (S, HOH, MFS) for years 2025-2028.
Senate Bill Passed July 1:
Reinstates a permanent charitable deduction for nonitemizers beginning in 2026 of up to $1,000 (S, HOH, MFS) or $2,000 (MFJ). Creates a new 0.5% floor on itemized charitable deductions that limits the deduction to the amount exceeding 0.5% of the deductible base.
Other TCJA limits
Current Law:
From 2018 through 2025:
- Limit on deducting wagering losses
- Limit on exclusion and deduction of wagering losses
- Repeal of exclusion for bicycle commuting reimbursements
- ABLE account changes
- Exclusion for student loan forgiveness after death
- Treatment of service on Sinai Peninsula
Trump Proposal:
Make TCJA limits permanent.
House Bill Passed May 22:
All listed TCJA changes would be made permanent.
Senate Bill Passed July 1:
Same as House, but would restore the ability to deduct up to 90% of wagering losses (up to wagering income).
Taxation of carried interest (Sec. 1061)
Current Law:
Treated as long-term capital gain (top rate 20%) if held over three years (TCJA); otherwise taxed at ordinary rates.
Trump Proposal:
Tax carried interest as ordinary income.
House Bill Passed May 22:
No provision.
Senate Bill Passed July 1:
No provision.
Taxation of Social Security benefits (Sec. 86)
Current Law:
- 0% is taxed if combined income (AGI + nontaxable interest + half SS benefits) is below $32,000 (MFJ) or $25,000 (S)
- Up to 50% is taxed if combined income is between $32,000 and $44,000 (MFJ) or $25,000 and $34,000 (S)
- Up to 85% is taxed if combined income exceeds $44,000 (MFJ) or $34,000 (S)
Trump Proposal:
All Social Security benefits would be exempt from tax.
House Bill Passed May 22:
Creates a $4,000 income tax deduction for taxpayers aged 65 and above for four years from 2025 through 2028. Deduction would be available without regard to whether deductions are itemized, but phases out beginning with MAGI exceeding $150,000 (MFJ) and $75,000 (S/HOH/MFS).
Senate Bill Passed July 1:
Creates a $6,000 personal exemption for taxpayers aged 65 and above for four years from 2025 through 2028. Exemption would phase out with MAGI exceeding $150,000 (MFJ) and $75,000 (S/HOH/MFS).
Taxation of tip income (Sec. 61)
Current Law:
Tip income is taxed under Sec. 61 and reported to employers monthly under Sec. 6053.
Trump Proposal:
Tips would be exempt from income tax and potentially employment tax.
House Bill Passed May 22:
Creates an income tax deduction equal to reported tip income from 2025 through 2028. Deduction would be available only for voluntary tips in occupations that “traditionally and customarily” received tips before 2025 in a business that is not a specified service trade or business under Section 199A. Deduction would be available without regard to whether deductions are itemized but only to taxpayers with income below the threshold for “highly compensated employees” under Section 414 ($160,000 in 2025). The provision would also extend the FICA tip credit to cover certain beauty services.
Senate Bill Passed July 1:
Same as House provision but deduction would be capped at $25,000 and would phase out for MAGI exceeding $150,000 (S) or $300,000 (MFJ).
Taxation of overtime pay (Sec. 61)
Current Law:
Overtime pay is subject to income and employment tax.
Trump Proposal:
Overtime pay would be exempt from income and employment taxes.
House Bill Passed May 22:
Creates an income tax deduction equal to overtime pay under the FLMA from 2025 through 2028. Deduction would be available without regard to whether deductions are itemized but only to taxpayers that are not “highly compensated employees” under Section 414 ($160,000 in 2025).
Senate Bill Passed July 1:
Same as House provision but deduction would be capped at $12,500 (S) or $25,000 (MFJ), and phase out for MAGI exceeding $150,000 (single) or $300,000 (joint).
Auto loan interest deduction
Current Law:
There is no current deduction for personal interest, which includes interest incurred on a personal vehicle loan.
Trump Proposal:
Interest on loans for domestic vehicles would be deductible.
House Bill Passed May 22:
Creates an above-the-line deduction for up to $10,000 in interest paid on a loan for vehicles with final assembly in the U.S. Deduction would phase out when modified AGI exceeds $100,000 (S) or $200,000 (MFJ). Effective for tax years 2025 through 2028.
Senate Bill Passed July 1:
Same as House except the deduction would be available for nonitemizers instead of as an above-the-line deduction.
State and local tax (SALT) cap (Sec. 164)
Current Law:
SALT itemized deductions limited to $10,000 ($5,000 MFS) of state and local income, property, and sales taxes through 2025.
Trump Proposal:
The SALT deduction cap would be eliminated.
House Bill Passed May 22:
Makes SALT cap permanent at an increased threshold of $40,000, beginning in 2025. The 40,000 threshold would phase down to $10,000 for income exceeding $500,000. These thresholds would increase by 1% each year from 2026 to 2033. The provision would also largely shut down state PTET workaround regimes unless 75% of the entities’ gross receipts come from a qualifying trade or business under Section 199A.
Senate Bill Passed July 1:
Sets a $40,000 SALT cap for 2025 that would phase down to $10,000 for income exceeding $500,000. These thresholds would increase by 1% each year from 2026 through 2029. In 2030, the SALT cap would revert to $10,000.
Credit for caregivers
Current Law:
No provision.
Trump Proposal:
A tax credit for caregivers would be provided.
House Bill Passed May 22:
No provision.
Senate Bill Passed July 1:
No provision.
Eliminate double taxation of Americans abroad
Current Law:
Individuals may exclude foreign earned income from U.S. tax up to a threshold indexed to inflation ($130,000 in 2025).
Trump Proposal:
Provide increased or unlimited exemption from U.S. tax on foreign income.
House Bill Passed May 22:
No provision.
Senate Bill Passed July 1:
No provision.
Active loss limit (Sec. 461)
Current Law:
Section 461 limits a taxpayer’s ability to deduct certain active business losses above a limit that is indexed to inflation and in 2025 reached $626,000 (MFJ) and $313,000 (S/HOH/MFS). The limited loss generally becomes an NOL in future years. The provision is set to expire for tax years beginning after Dec. 31, 2028.
Trump Proposal:
No specific provision.
House Bill Passed May 22:
Makes the active loss limit under Section 461(l) permanent, while requiring losses arising from the limit to be tracked separately and applied as part of the Section 461(l) calculation in future years.
Senate Bill Passed July 1:
Makes the active loss limit under Section 461(l) permanent while reducing the threshold at which the limit applies.
Tax-preferred savings accounts
Current Law:
The tax code provides for some tax-preferred savings and spending accounts.
Trump Proposal:
No specific provision.
House Bill Passed May 22:
Creates a new type of tax-preferred account for minors. Contributions would be capped annually at $5,000 and would not be deductible, but the accounts would generally be exempt from tax, with qualified distributions taxed as capital gains. Under a pilot program, children born from 2025 through 2028 would receive a $1,000 contributory credit in their account.
Senate Bill Passed July 1:
Same general provision as House, with some minor and technical modifications.
Lifetime exemption amount (Secs. 2010, 2505)
Current Law:
Lifetime exemption amount set at $10 million indexed to inflation ($13.99 million in 2025). The top estate tax rate is 40%. Exemption amount would be cut in half in 2026. 40% rate is permanent.
Trump Proposal:
The exemption amount would be increased and made permanent (or the estate tax would be repealed in full).
House Bill Passed May 22:
Exemption amount would be increased to $15 million per taxpayer in 2026 and indexed for inflation thereafter.
Senate Bill Passed July 1:
Same as House.
Corporate rate (Sec. 11).
Current Law:
Flat 21% rate.
Trump Proposal:
Provide 15% rate for domestic manufacturing.
House Bill Passed May 22:
No provision.
Senate Bill Passed July 1:
No provision.
Bonus depreciation (Sec. 168(k)).
Current Law:
Bonus depreciation phases down to:
- 80% in 2023
- 60% in 2024
- 40% in 2025
- 20% in 2026
- 0% thereafter
Trump Proposal:
Make 100% bonus depreciation permanent and extend to factories.
House Bill Passed May 22:
Restores 100% bonus depreciation for property placed in service after Jan. 19, 2025, and before 2030. In addition, 100% expensing would be extended to cover nonresidential real property that is considered qualified production property if construction of the property begins after Jan. 19, 2025, and before 2030 and the property is placed in service by the end of 2032.
Senate Bill Passed July 1:
Same as House but it would be made permanent (other than for the new category production property).
Production property would be required to be placed in service by the end of 2030 instead of 2032.
Deduction for domestic research and experimental expenditures (Sec. 174).
Current Law:
For tax years beginning after 2022, taxpayers must amortize domestic research costs over five years and foreign costs over 15 years.
Trump Proposal:
Restore and make permanent expensing of research costs.
House Bill Passed May 22:
Restore the expensing of domestic research costs for tax years beginning after Dec. 31, 2024, and before Jan. 1, 2030 (foreign research costs would still be amortized over 15 years). Taxpayers would retain election to capitalize. The provision would require taxpayers to reduce their deduction by the amount of any research credit.
Senate Bill Passed July 1:
Same as House but domestic research cost expensing would be made permanent with additional transition rules.
Taxpayers would have the option to claim unused amortization deductions from tax years beginning in 2022 to 2024 in the first tax year beginning after 2024 or ratably in the first two tax years beginning after 2024. Alternatively, taxpayers that meet the gross receipts threshold for simplified accounting methods under Section 448(c) could amend returns to retroactively claim full expensing.
Business interest deduction calculation (Sec. 163(j)).
Current Law:
For tax years beginning after 2022, taxpayers must include amortization, depreciation, and depletion in the calculation of adjusted taxable income (ATI) for calculating whether the deduction for net interest expense exceeds the cap of 30% of ATI.
Trump Proposal:
Restore and make permanent the previous calculation allowing taxpayers to exclude amortization, depreciation, and depletion from ATI.
House Bill Passed May 22:
Restores the more favorable calculation of ATI for tax years beginning after Dec. 31, 2024, and before Jan. 1, 2030. The provision would also adjust the floor plan financing exception.
Senate Bill Passed July 1:
Permanently restores the more favorable calculation for tax years beginning after Dec. 31, 2024, but amends the provision for tax years beginning after Dec. 31, 2025.
Interest capitalized to other assets would be subject to the limit (except interest capitalized to straddles under Section 263(g) or to certain production property under Section 263A(f)) and ATI would exclude income inclusions from Subpart F, GILTI, and any Section 78 gross-up.
Limitation on expensing of certain depreciable assets (Sec. 179).
Current Law:
Section 179 allows taxpayers to expense qualified property up to a cap that is indexed to inflation ($1.25 million in 2025), but this cap is reduced dollar for dollar by the amount of qualified property placed in service that exceeds a threshold indexed to inflation ($3.13 million in 2025).
Trump Proposal:
No specific proposal.
House Bill Passed May 22:
Increases the Section 179 deduction cap to $2.5 million with a phaseout threshold of $4 million, indexed to inflation.
Senate Bill Passed July 1:
Same as House.
Increase in gross receipts threshold for small manufacturing companies to use cash method of accounting (Sec. 448).
Current Law:
Section 448 allows taxpayers with less than $25 million in gross receipts (indexed to inflation and reaching $31 million in 2025) to use the cash method of accounting and other simplified accounting methods.
Trump Proposal:
No specific proposal.
House Bill Passed May 22:
Increases the threshold to $80 million for certain “manufacturing taxpayers,” but with adjusted aggregation rules for gross receipts.
Senate Bill Passed July 1:
No provision.
Long-term contracts (Section 460).
Current Law:
Taxpayers building homes are generally exempt from the percentage of completion method for long-term contracts. Home builders are also exempt from the uniform capitalization rules if they meet the gross receipts test under Section 448(c) ($31 million in 2025) and the contracts do not exceed two years.
Trump Proposal:
No proposal.
House Bill Passed May 22:
No provision
Senate Bill Passed July 1:
Expands the exception from the percentage of completion method for home construction to include any residential construction and expands the exception from the uniform capitalization rules to apply to residential construction while increasing the allowable construction period to three years.
Qualified small business stock (Sec. 1202).
Current Law:
Taxpayers can exclude the gain from the sale of QSB stock held for more than five years.
Trump Proposal:
No proposal.
House Bill Passed May 22:
No provision
Senate Bill Passed July 1:
Provides a 50% exclusion for QSB stock held three years and a 75% exclusion for stock held four years.
Increases the current limit on the exclusion from $10 million (or 10 times basis) to $15 million indexed to inflation beginning in 2027.
Increases the current limit on assets at the time of stock issuance from $50 million to $75 million, indexed to inflation beginning in 2027. Provisions are generally effective for stock issued after the date of enactment.
Advanced manufacturing investment credit (Sec. 48D).
Current Law:
Section 48D provides a 25% credit for semiconductor manufacturing facilities.
Trump Proposal:
No proposal.
House Bill Passed May 22:
No provision
Senate Bill Passed July 1:
Increases the credit from 25% to 35% for property placed in service after 2025.
New Markets Tax Credit (Sec. 45D).
Current Law:
The new markets tax credit is scheduled to expire in 2026
Trump Proposal:
No specific proposal.
House Bill Passed May 22:
No provision
Senate Bill Passed July 1:
Makes the credit permanent.
New Markets Tax Credit (Sec. 45D).
Current Law:
The new markets tax credit is scheduled to expire in 2026
Trump Proposal:
No specific proposal.
House Bill Passed May 22:
No provision
Senate Bill Passed July 1:
Makes the credit permanent.
Opportunity zones (Sec. 1400Z).
Current Law:
Investment in a Qualified Opportunity Fund allows taxpayers to defer capital gain and receive a step-up in basis so that appreciation on the qualified investment is tax-free after a 10-year holding period. Qualified investments must be made by the end of 2026.
Trump Proposal:
Extend current provision.
House Bill Passed May 22:
Extends program to allow qualified investments from 2027 through 2033. The mandatory recognition date for these investments would be Dec. 31, 2033, and taxpayers would receive a 10% increase in basis for holding onto the property for five years. Taxpayers could designate up to $10,000 of their aggregate investments to offset ordinary income, with no recapture. The provision would require new designations of opportunity zones, with special benefits for a new category of rural opportunity zones. The provision would also require additional reporting.
Senate Bill Passed July 1:
Makes program permanent over 10-year rolling designation periods. Gain deferred on investments made after 2026 would be recognized five years after investment with a 10% increase in basis.
Step-up in basis to FMV after 10 years would be capped at FMV after 30 years.
Makes changes to designations and reporting requirements similar to the House provision.
Form 1099-K reporting (Sec. 6050W).
Current Law:
For payments made after 2021, Section 6050W generally requires payment settlement entities to perform reporting once aggregate annual payments to a payee exceed $600 or more. The IRS delayed implementation of this threshold so payments made in 2022 and 2023 were reportable only to the extent aggregate payments exceeded $20,000 and the number of transactions exceeded 200. Reporting is required for 2024 and 2025 only if aggregate payments exceed $5,000 in 2024 and $2,500 in 2025 (without regard to the number of transactions).
Trump Proposal:
No specific provision.
House Bill Passed May 22:
Reinstates the 200 transaction and $20,000 threshold retroactive to the enactment of the $600 threshold.
Senate Bill Passed July 1:
Same as House.
Form 1099-NEC and 1099-MISC reporting (Secs. 6041, 6041A).
Current Law:
Sections 6041 and 6041A generally require reporting on non-employee compensation or payments from a business for services on Form 1099-NEC or 1099-MISC once aggregate payments to a payee exceed $600 for the year.
Trump Proposal:
No specific provision.
House Bill Passed May 22:
Increases the threshold for reporting to $2,000 beginning in 2026 and indexes it to inflation thereafter.
Senate Bill Passed July 1:
Same as House.
1% floor on corporate charitable contribution deduction (Sec. 170).
Current Law:
Corporations are generally permitted to deduct charitable contributions up to 10% of taxable income.
Trump Proposal:
No specific provision.
House Bill Passed May 22:
Permits a corporation to deduct a charitable contribution only to the extent it exceeds 1% of taxable income (up to 10% of taxable income) for tax years beginning after 2025..
Senate Bill Passed July 1:
Same as House.
Sports franchise amortization (Sec. 197).
Current Law:
Section 197 generally allows taxpayers to amortize intangible assets over a 15-year period after they are acquired.
Trump Proposal:
Eliminate “special tax breaks for sports owners.”
House Bill Passed May 22:
Limits the amount amortizable under Section 197 to 50% for acquisitions of professional sports franchises made after the date of enactment.
Senate Bill Passed July 1:
No provision.
Low-income housing credit (Sec. 42).
Current Law:
The low-income housing tax credit offers credits for certain low-income building projects that receive an allocation up to state caps.
Trump Proposal:
No specific provision.
House Bill Passed May 22:
Increases the population component of the state low-income tax credit ceiling to 12.5% for 2026, 2027, 2028, and 2029. The provision would also modify the tax-exempt bond financing requirement and temporarily include certain Indian and rural areas.
The proposal would generally be applicable after 2025.
Senate Bill Passed July 1:
Permanently increases the population component of the state low-income tax credit ceiling to 12%.
Modifies the tax-exempt bond financing requirement.
Executive compensation (Sec. 162(m)).
Current Law:
Section 162(m) generally denies public companies a deduction for compensation in excess of $1 million paid to “covered employees.”
Trump Proposal:
No specific provision.
House Bill Passed May 22:
Expands the aggregation rules so that the identification of covered employees and the calculation of compensation would be made on a controlled group basis under the rules in Section 414.
Senate Bill Passed July 1:
Same as House.
Disguised sales (Sec. 707).
Current Law:
Section 707 provides rules for certain transactions between partners and a partnership.
Trump Proposal:
No specific provision.
House Bill Passed May 22:
Clarifies that the rules prescribed under Section 707(a)(2) are self-executing and not contingent on the issuance of regulations by Treasury.
Senate Bill Passed July 1:
Same as House.
Remittance excise tax.
Current Law:
There is not specific current excise tax on remittances.
Trump Proposal:
No specific provision.
House Bill Passed May 22:
Creates a 3.5% excise tax on certain “remittance transfers” made after 2025 with an exception for transfers from U.S. citizens and nationals.
Senate Bill Passed July 1:
Creates a 1% excise tax on remittance transfers made after 2025 with an exception for transfers sent from most accounts at financial institutions.
REIT asset test (Sec. 856).
Current Law:
REITs are subject to a qualified asset test that generally allows them to hold no more than 20% of their assets in taxable REIT subsidiaries.
Trump Proposal:
No specific provision.
House Bill Passed May 22:
Increases the amount of allowable assets held in taxable REIT subsidiaries to 25%..
Senate Bill Passed July 1:
Same as House.
Meals deduction (Sec. 274).
Current Law:
Beginning in 2026, employers will no longer be able to deduct meals provided to employees at the convenience of the employer (if the meals are excluded from employee income).
Trump Proposal:
No specific provision.
House Bill Passed May 22:
Provides an exception allowing taxpayers to deduct meals provided at the convenience of the employer if the meals were sold by the taxpayer in a bona fide transaction for full consideration.
Senate Bill Passed July 1:
Same as House but adds additional exception for meals provided on certain fishing vessels or processing plants.
Employee retention credit (Sec. 3134).
Current Law:
The employee retention credit was available for certain wages paid in specific periods of 2020 and 2021.
Trump Proposal:
No specific provision.
House Bill Passed May 22:
Disallows refunds effective as of the date of enactment unless the claim was filed by Jan. 31, 2024. Extends the statute of limitations for certain claims and increases preparer and promoter penalties in certain circumstances.
Senate Bill Passed July 1:
Substantially similar to House provision.
Global intangible low-taxed income (GILTI) (Sec. 951A).
Current Law:
Intended to prevent U.S. multinational corporations from shifting profits to low-tax foreign jurisdictions by imposing a minimum tax on certain foreign earnings of U.S. corporations; effective rate is 10.5% before FTC haircut), increasing to 13.125% after 2025.
Trump Proposal:
Extend current rate.
House Bill Passed May 22:
Lowers the current Section 250 deduction slightly for tax years beginning after 2025, creating a permanent GILTI effective rate of 10.668% (before FTC haircut). The bill would also exclude qualified Virgin Islands services income from GILTI tested income.
Senate Bill Passed July 1:
Reduces the Section 250 deduction to 40% for tax years beginning after 2025, creating an effective rate of 12.6% (before FTC haircut). FTC haircut would be reduced from 20% to 10%. Taxes associated with PTET would no longer be treated as deemed paid under Section 78. QBAI return is repealed for purposes of the Section 951A calculation. Limits expense allocation for FTC purposes to “directly allocable” deductions and expressly excludes interest and R&E.
Foreign-derived intangible income (FDII) (Sec. 250).
Current Law:
Intended to encourage the sale of goods and services to foreign markets, it permits U.S. corporations to claim a reduced rate on income derived from exports; effective rate is 13.125% of eligible income, increasing to 16.4% after 2025.
Trump Proposal:
Extend current rate.
House Bill Passed May 22:
The provision would lower the current Section 250 deduction slightly, creating a permanent FDII effective rate of 13.335%.
Senate Bill Passed July 1:
Reduces the Section 250 deduction to 33.34% for tax years beginning after 2025, creating an effective rate of 14%. QBAI reduction to FDII is repealed. Eligible income is reduced only by deductions properly allocable to the income and expressly excludes interest and R&E. Excludes income or gain from Section 367(d) transactions disposing of intangible property and property subject to depreciation amortization or depletion (effective June 16, 2025).
Base erosion and anti-abuse tax (Sec. 59A).
Current Law:
Intended to prevent large multinational corporations from eroding the U.S. tax base with deductible payments (interest, royalties, etc.) to foreign affiliates in low-tax jurisdictions. BEAT imposes an additional tax on certain corporations that make large payments to foreign related parties to discourage profit shifting. It generally applies to corporations with annual gross receipts of $500 million or more in a three-year period. The rate is 10%, increasing to 12.5% after 2025 with other changes.
Trump Proposal:
Extend the current rate and credit rules.
House Bill Passed May 22:
The provision would permanently increase the BEAT to 10.1% and make permanent the current favorable treatment of credits.
Senate Bill Passed July 1:
Increases BEAT rate to 10.5%.
Makes permanent the current favorable treatment of credits.
Reciprocal taxes.
Current Law:
Section 891 allows the president to double most taxes on citizens and corporations of a foreign country that imposes discriminatory or extraterritorial taxes on U.S. citizens or corporations (this authority has never been invoked).
Trump Proposal:
Impose reciprocal taxes and tariffs on countries with “unfair” tax or trade policies.
House Bill Passed May 22:
Creates new Section 899, which increases tax and withholding rates on resident taxpayers from countries imposing “unfair foreign taxes.” Unfair foreign taxes would include the UTPR and digital services taxes, diverted profits taxes, “extraterritorial taxes,” “discriminatory taxes,” and any tax “disproportionally borne” by U.S. persons. Rates would increase five percentage points per year up to a maximum of 20 percentage points above the statutory rate. Domestic entities controlled by covered foreign resident taxpayers would also be subject to unfavorable BEAT changes. Provision would generally be effective for tax years beginning in 2026 and later.
Senate Bill Passed July 1:
No provision.
CFC look-through rule (Section 954(c)(6))
Current Law:
CFC look-through rules are scheduled to expire for tax years beginning on or after January 1, 2026.
Trump Proposal:
No specific proposal.
House Bill Passed May 22:
No provision.
Senate Bill Passed July 1:
Makes the CFC look-through rule permanent.
Downward attribution rule (Sec. 958(b)(4)).
Current Law:
TCJA repealed the exception for downward attribution under Section 958(b)(4).
Trump Proposal:
No specific proposal.
House Bill Passed May 22:
No provision.
Senate Bill Passed July 1:
Restores the exception from downward attribution rules under Section 958(b)(4), while adding a narrower rule under Section 951B that more closely aligns with TCJA’s intent.
Foreign tax credits (Section 904).
Current Law:
Income from inventory produced and sold by the taxpayers is generally sourced based on production activities.
Trump Proposal:
No specific proposal.
House Bill Passed May 22:
No provision.
Senate Bill Passed July 1:
Treats income from the sale of inventory produced in the U.S. and sold through foreign branches as foreign-source income, capped at 50%.
Pro rata rules (Section 951).
Current Law:
The pro rata rules generally require a U.S. shareholder to own stock of the CFC on the last day on which the foreign corporation was a CFC.
Trump Proposal:
No specific proposal.
House Bill Passed May 22:
No provision.
Senate Bill Passed July 1:
Requires a U.S. shareholder of a CFC to include its pro rata share of Subpart F or GILTI income if it owned stock in the CFC at any time during the foreign corporation’s tax year in which it was a CFC.
Clean fuel production credit (Sec. 45Z).
Current Law:
Section 45Z provides a credit for the production of certain transportation fuels that meet lifecycle greenhouse gas emissions standards. The credit is scheduled to expire for fuel sold after 2027.
Trump Proposal:
Repeal all Inflation Reduction Act (IRA) energy credits.
House Bill Passed May 22:
Extends the credit to fuel sold through the end of 2031, with a new requirement that feedstock be produced or grown in the U.S., Mexico, or Canada. The calculation of greenhouse gas emissions would be amended to exclude indirect land use changes. Taxpayers that are foreign entities of concern would not qualify for the credit for tax years beginning after the date of enactment. Taxpayers that are “foreign influenced entities” would be ineligible for the credit for tax years beginning two years after the date of enactment. The credits would not be transferable for fuel produced after 2027.
Senate Bill Passed July 1:
Same as House, but retains transferability and reinstates a stackable small agri-biodiesel credit under Section 40A.
Previously owned clean vehicle credit (Sec. 25E).
Current Law:
Section 25E provides a credit for certain previously owned EVs and other “clean” vehicles.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
Repeals the credit for purchases after 2025.
Senate Bill Passed July 1:
Repeals the credit for purchases after Sep. 30, 2025.
Clean vehicle credit (Sec. 30D).
Current Law:
Section 30D provides a credit for certain EVs and other “clean” vehicles.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
Repeals the credit for purchases after 2025 unless the manufacturer has sold fewer than 200,000 clean vehicles since 2010, in which case the credit expires for purchases after 2026.
Senate Bill Passed July 1:
Repeals the credit for purchases after Sep. 30, 2025.
Commercial clean vehicles credit (Sec. 45W).
Current Law:
Section 45W provides a credit for certain commercial EVs and other clean vehicles.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
Repeals the credit for purchases after 2025 unless the vehicle was acquired pursuant to a written binding contract in place before May 12, 2025.
Senate Bill Passed July 1:
Repeals the credit for purchases after Sep. 30, 2025.
Alternative fuel vehicle refueling property credit (Sec. 30C).
Current Law:
Section 30C provides a credit for certain EV charging property and other alternative fuel refueling property.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
Repeals the credit for property placed in service after 2025.
Senate Bill Passed July 1:
Repeals the credit for property placed in service after June 30, 2026.
Energy-efficient home improvement credit (Sec. 25C).
Current Law:
Section 25C provides a credit for certain energy-efficient home improvement property.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
Repeals the credit for property placed in service after 2025.
Senate Bill Passed July 1:
Repeals the credit for property placed in service after Dec. 31, 2025.
Residential clean energy credit (Sec. 25D).
Current Law:
Section 25D provides a credit for certain residential clean energy property.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
Repeals the credit for property placed in service after 2025.
Senate Bill Passed July 1:
Repeals the credit for property placed in service after Dec. 31, 2025.
Energy-efficient commercial buildings deduction (Sec. 179D).
Current Law:
Section 179D offers a deduction of up to $5 per square foot for certain energy-efficient improvements to lighting, HVAC, and hot water systems and the building envelope.
Trump Proposal:
Repeal all IRA energy provisions.
House Bill Passed May 22:
No provision.
Senate Bill Passed July 1:
Repeals the deduction for construction beginning after June 30, 2026.
New energy-efficient home credit (Sec. 45L).
Current Law:
Section 45L provides a credit for construction of energy-efficient new homes.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
Repeals the credit for acquisitions after 2025 unless construction began before May 12, 2025.
Senate Bill Passed July 1:
Repeals the credit for acquisitions after Jun 30, 2026.
Energy property depreciation (Sec. 168).
Current Law:
Qualified energy property generally has a five-year depreciable life.
Trump Proposal:
No specific proposal.
House Bill Passed May 22:
No provision.
Senate Bill Passed July 1:
Repeals the five-year depreciable life for energy property placed in service after the date of enactment.
Election to have credit paid directly (Sec. 6417).
Current Law:
Section 6417 provides a direct refundable payment option for tax-exempt entities and for certain credits.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
No provision.
Senate Bill Passed July 1:
No provision.
Clean energy production credit (Sec. 45Y).
Current Law:
The production tax credit under Section 45Y offers a per-kilowatt credit for the production of electricity from sources meeting lifecycle greenhouse gas emissions standards. The credit is scheduled to phase out when certain nationwide emissions goals are reached (or 2032 if later). Taxpayers must generally meet prevailing wage and apprenticeship rules to receive full credit amounts. Additional credits are available for projects in energy communities or meeting domestic sourcing requirements.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
Repeals the credit for all property except nuclear property beginning construction more than 60 days after enactment or placed in service after 2028. The credit would be available for advanced nuclear facilities beginning construction before 2029. Facilities receiving “material assistance” from any prohibited entity would not be eligible if construction began after Dec. 31, 2025. Credits would be disallowed for any tax years beginning after the date of enactment if the taxpayer is a prohibited foreign entity. Credits would be disallowed for entities receiving “material assistance” from any “foreign influenced entity” or sending payments to a prohibited foreign entity if construction began more than two years after the date of enactment. No credit would be allowed for tax years beginning after the date of enactment for leased wind and solar property qualifying for the residential tax credit under Section 25D.
Senate Bill Passed July 1:
Phases out the credit for projects beginning construction after 2033, except for wind and solar. Wind and solar projects must be placed in service by the end of 2027 if they begin construction more than 12 months after the date of enactment. Facilities receiving “material assistance” from any prohibited entity would not be eligible if construction began after Dec. 31, 2025, but the definition of material assistance would include a cost threshold. No credit would be allowed for taxpayers that are prohibited foreign entities for tax years beginning after the date of enactment.
Clean energy investment credit (Sec. 48E).
Current Law:
The investment tax credit under Section 48E provides a credit against the cost basis of qualified property that generates electricity meeting lifecycle greenhouse gas emissions standards or that is qualified energy storage or interconnection property. The credit is scheduled to phase out when certain nationwide emissions goals are reached (or 2032 if later). Taxpayers must generally meet prevailing wage and apprenticeship rules to receive full credit amounts. Additional 10% credits are available for projects in energy communities or meeting domestic sourcing requirements.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
Repeals the credits for all property except nuclear property for property beginning construction more than 60 days after enactment or placed in service after 2028. The credit would be available for advanced nuclear facilities that begin construction before 2029. Facilities receiving “material assistance” from any prohibited foreign entity would not be eligible if construction began after Dec. 31, 2025. Credits would be disallowed for any tax years beginning after the date of enactment if the taxpayer is a prohibited foreign entity. Credits would be disallowed for entities receiving “material assistance” from any “foreign influenced entity” or sending payments to a prohibited foreign entity if construction began more than two years after the date of enactment. No credit would be allowed for tax years beginning after the date of enactment for leased wind and solar property qualifying for the residential tax credit under Section 25D.
Senate Bill Passed July 1:
Phases out the credit for projects beginning construction after 2033, except for wind and solar. Wind and solar projects must be placed in service by the end of 2027 if they begin construction more than 12 months after the date of enactment. Facilities receiving “material assistance” from any prohibited entity would not be eligible if construction began after Dec. 31, 2025, but the definition of material assistance would include a cost threshold. No credit would be allowed for taxpayers that are prohibited foreign entities for tax years beginning after the date of enactment. Increases the domestic sourcing threshold for the 10% additional credit from 40% to 45% for construction beginning after June 16, 2025, 50% for construction beginning after Dec. 31, 2025, and 55% for construction beginning after 2026.
Credit for carbon oxide sequestration (Sec. 45Q).
Current Law:
Section 45Q provides a credit per metric ton of carbon captured and permanently sequestered. The maximum credit rates in 2025 for equipment placed in service after 2022 are $85 per metric ton for geologic storage and $60 per metric ton for tertiary injectant or other productive use (increased rates are available for direct air capture). The credit expires for projects beginning construction after 2032.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
Repeals the credit for taxpayers that are foreign entities of concern to qualify for tax years beginning after the date of enactment. Taxpayers that are a “foreign influenced entity” would be ineligible for the credit for tax years beginning two years after the date of enactment. The credits would not be transferable for projects beginning construction more than two years after the date or enactment.
Senate Bill Passed July 1:
Increases the credit rates for productive use to the same $85 per metric ton available for geologic storage (with corresponding increase for direct air capture rates). Taxpayers that are a “foreign specified entity” or “foreign influenced entity” would be ineligible for the credit for tax years beginning after the date of enactment.
Clean hydrogen production tax credit (Sec. 45V).
Current Law:
Section 45V provides a production tax credit for producing hydrogen meeting certain lifecycle greenhouse gas emissions standards. The credit expires for projects beginning construction after 2032.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
Repeals the credit for projects beginning construction after 2025.
Senate Bill Passed July 1:
Repeals the credit for construction beginning after 2027.
Zero-emission nuclear power production credit (Sec. 45U).
Current Law:
Section 45U provides a production tax credit for producing nuclear power for facilities placed in service before August 16, 2022.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
Repeals the credit for tax years beginning after 2031. The provision would not allow taxpayers that are foreign entities of concern to qualify for the credit for tax years beginning after the date or enactment. Taxpayers that are a “foreign influenced entity” would be ineligible for the credit for tax years beginning two years after the date of enactment.
Senate Bill Passed July 1:
The provision would not allow taxpayers that are foreign entities of concern to qualify for the credit for tax years beginning after the date of enactment. Taxpayers that are a “foreign influenced entity” would be ineligible for the credit for tax years beginning two years after the date of enactment.
Advanced manufacturing production credit (Sec. 45X).
Current Law:
Section 45X provides a credit for producing and selling certain wind, energy, inverter, and battery components, as well as critical minerals. The credit begins to phase out in 2030, except for critical minerals, for which the credit is permanent.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
Repeals the credit for wind energy components sold after 2027 and for all other components sold after 2031. Denies a credit for taxpayers that are foreign entities of concern beginning after the date of enactment. Taxpayers that are a “foreign influenced entity” would be ineligible for the credit for tax years beginning two years after the date of enactment. There are also restrictions on components made with material assistance from a foreign entity of concern or making any payments to a prohibited foreign entity. The credit would not be transferable for components sold after Dec. 31, 2027.
Senate Bill Passed July 1:
Repeals the credit for wind energy components sold after 2027 and phases out the credit for critical minerals, with 75% of the credit available for mineral produced in 2031, 50% for 2032, 25% for 2033, and no credit after 2033. Adds new credit for metallurgical coal. Denies a credit for components manufactured after 2025 if “material assistance” was provided by any prohibited entity, with the definition of material assistance including a cost threshold. No credit would be allowed for specified foreign entities for tax years beginning after enactment.
Energy investment tax credit (Sec. 48).
Current Law:
The investment tax credit under Section 48 is available only for projects that began construction before 2025, except for geothermal heat pump property, which must be placed in service before 2035.
Trump Proposal:
Repeal all IRA energy credits.
House Bill Passed May 22:
Phases out the credit for geothermal property for projects beginning in 2030 and would be completely repealed for projects beginning construction in 2032 or later. The provision would not allow taxpayers that are foreign entities of concern to qualify for the credit for tax years beginning after the date of enactment. Taxpayers that are a “foreign influenced entity” would be ineligible for the credit for tax years beginning two years after the date of enactment. The credits would not be transferable for projects beginning construction more than two years after the date of enactment.
Senate Bill Passed July 1:
Eliminates the credit for construction beginning after the date of enactment.
Qualifying income of certain publicly traded partnerships (Sec. 7704).
Current Law:
Publicly traded partnerships can generally be taxed as partnerships only if 90% of their income comes from qualifying income sources, such as real property or certain traditional energy activity.
Trump Proposal:
No specific provision.
House Bill Passed May 22:
Adds income from carbon capture facilities or for the transportation or storage of sustainable aviation fuel or hydrogen to the definition of qualifying income.
Senate Bill Passed July 1:
Adds to the definition of qualifying income any income from carbon capture facilities, the transportation or storage of sustainable aviation fuel or hydrogen, nuclear energy, hydropower, and geothermal energy.
Excise tax on private foundation net investment income (Sec. 4940(d)).
Current Law:
Net investment income of private foundations is subject to a 1.39% excise tax, with a tiered rate structure based on the size of the foundation’s assets.
Trump Proposal:
No proposal.
House Bill Passed May 22:
Increases rates in a tiered structure. For private foundations with assets
- Under $50 million, the rate would remain at 1.39%
- Equal to or greater than $50 million but less than $250 million, the rate would be 2.78%
- Equal to or greater than $250 million but less than $5 billion, the rate would be 5%
- At least $5 billion, the rate would be 10%.
The proposal would be effective for taxable years beginning after the date of enactment.
Senate Bill Passed July 1:
No provision.
Excise tax on investment income of certain private colleges and universities (Sec. 4968).
Current Law:
Net investment income of certain educational institutions is subject to a 1.4% excise tax.
Trump Proposal:
Large university endowments would be subject to a 35% excise tax.
House Bill Passed May 22:
Increase rates under a new tiered structure. For institutions with adjusted per-student endowments:
- Over $500,000 but not exceeding $750,000, the rate would remain at 1.4%
- Over $750,000 but not exceeding $1,250,000, the rate would be 7%
- Over $1,250,000 but not exceeding $2 million, the rate would be 14%
- Over $2 million, the rate would be 21%
The proposal would be effective after 2025.
Senate Bill Passed July 1:
Increases rates under a new tiered structure. For institutions with adjusted per-student endowments:
- Over $500,000 but not exceeding $750,000, the rate would remain at 1.4%
- Over $750,000 but not exceeding $2 million, the rate would be 4%
- Over $2 million, the rate would be 8%
Excise tax on highly paid employees of tax-exempt organizations (Sec. 4960).
Current Law:
A 21% excise tax is imposed on compensation over $1 million paid to “covered employees,” defined as the five most highly compensated employees or former employees of the organization or someone who was a covered employee for any period after 2016.
Trump Proposal:
No proposal.
House Bill Passed May 22:
Revises definition of covered employee to include all current and former employees for tax years beginning after 2025.
Senate Bill Passed July 1:
Same as House, except that the provision would be limited to former employees employed in tax years beginning after 2016.
Taxation of qualified transportation fringe benefits (Sec. 511).
Current Law:
Unrelated business taxable income (UBTI) of an exempt organization does not include amounts paid or incurred for qualified transportation fringe benefits (such as parking or transit passes).
A provision in the TCJA that was previously repealed included a similar provision.
Trump Proposal:
No proposal.
House Bill Passed May 22:
UBTI would include amounts paid or incurred by tax-exempt organizations for qualified transportation fringe benefits. No deduction would be permitted for such expenditures.
The proposal would be effective for amounts paid or incurred after 2025.
Senate Bill Passed July 1:
No provision.
Taxation of research income (Sec. 512).
Current Law:
Income from research is generally excluded from UBTI if the tax-exempt organization is operated primarily to carry on research with results that are freely available to the general public.
Trump Proposal:
No proposal.
House Bill Passed May 22:
Narrows the exception for UBTI so it applies only if the actual results of research are freely available to the general public.
Senate Bill Passed July 1:
No provision.
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