United States

United States (US) tax reform enacted in July 2025 

The One Big Beautiful Bill Act (OBBBA) was signed into law by President Trump on July 4, 2025. OBBBA permanently extends, with modifications, certain individual tax provisions enacted as part of the 2017 Tax Cuts and Jobs Act (P.L. 115-97 or so-called TCJA) that were set to change at the end of 2025. The new law includes various tax relief, as well as revenue-raising measures that were intended to offset part of the cost of the legislation.     

New individual tax-related provisions include, for example: 

• The current income tax rates and brackets established by TCJA are now permanent, with minor adjustments. 

• The state and local tax (SALT) deduction is temporarily increased from USD 10,000 (USD 5,000 for married individuals filing a separate return) to USD 40,000 (USD 20,000 for married individuals filing a separate return) beginning for the 2025 tax year. However, the increased SALT cap begins to phase out for taxpayers with modified adjusted gross income (MAGI) of USD 500,000 or less (USD 250,000 for married individuals filing a separate return), but not below USD 10,000 (USD 5,000 for married individuals filing separately).  

• Increased alternative minimum tax (AMT) exemptions are permanently extended, with modifications. 

• Excess business loss limitation for noncorporate taxpayers is now permanent with the applicable threshold amounts reset for inflation. 

• Pass-through business income deduction is made permanent, with certain modifications. 

• Enhanced child tax credit. 

• Higher standard deductions implemented by TCJA are now permanent, along with additional enhancements. 

• Limits to itemised deductions (including the so-called ‘Pease’ limitation) are revised and made permanent, along with other related modifications. 

• Lifetime estate, gift, and GST tax exemption is increased, made permanent, and indexed for inflation. 

• Numerous changes for charitable contributions including a new permanent floor; a permanent increase in the adjusted gross income limitation for cash contributions to certain charities and funds; and a new nonrefundable tax credit for certain cash contributions. 

• Expansion of qualified small business stock gain exclusion. 

• Other changes include provisions related to personal casualty and theft losses (including certain disaster-related personal casualty losses), and new temporary deductions for qualified tip income, qualified overtime compensation, and certain qualified passenger vehicle loan interest.