Sponsors (54)
The bill locks in many TCJA‑era individual tax cuts and creates predictable, permanent rules that lower taxes for many families and individuals, while concentrating costs on small businesses, homeowners/high‑SALT taxpayers, and the federal budget — reducing revenue and limiting future policy flexibility.
Millions of individual taxpayers, especially middle‑class families, will pay less federal income tax because the bill locks in lower marginal tax rates, raises the standard deduction, increases the child tax credit, and makes dependent and casualty‑loss amounts permanent and indexed.
Taxpayers and the IRS get clearer, more stable statutory references and permanence for many TCJA provisions, reducing legal ambiguity and giving longer‑term certainty for planning and enforcement.
Middle‑class and other individual taxpayers exposed to the AMT keep higher exemption amounts that are indexed for inflation, lowering AMT liability and preserving real exemption value over time.
Making many TCJA provisions permanent and keeping higher AMT exemptions will reduce federal revenue long‑term, increasing the federal deficit and raising the risk of future tax increases or spending cuts.
Small‑business owners and noncorporate pass‑through taxpayers lose major tax relief because the qualified business income (QBI) deduction is repealed and excess business loss limitations are reinstated/expanded, likely raising taxes for many sole proprietors and partnerships.
Homeowners and residents of high‑tax states are worse off because the $10,000 SALT cap is made permanent and the mortgage acquisition debt cap is lowered, increasing after‑tax housing and state/local tax costs for many filers.
Based on analysis of 4 sections of legislative text.
Introduced January 3, 2025 by Vernon G. Buchanan · Last progress January 3, 2025
Makes many individual-income tax provisions from the 2017 tax law permanent and changes a wide range of taxpayer rules. It replaces and adjusts individual rate tables and indexing rules, alters capital-gains brackets, repeals the qualified-business-income deduction for pass-through owners, reinstates limits on excess business losses, raises standard deductions and child tax credits, limits state and local tax deductions, narrows mortgage-interest deductions, and makes permanent or modifies several itemized-deduction and exclusion rules. It also changes rules for 529/ABLE rollovers and student-loan discharge exclusions, eliminates personal exemptions and moves dependent rules into a new code section, and raises and reindexes the individual AMT exemption. Most changes apply to taxable years beginning after enactment, with some distribution- and discharge-specific rules effective for actions after enactment or after Dec. 31, 2024. The bill requires many conforming edits throughout the Internal Revenue Code and would materially alter tax liabilities and planning for individuals, families, and some small businesses.