Sponsors (54)
Introduced January 3, 2025 by Vernon G. Buchanan · Last progress January 3, 2025
The bill provides meaningful direct tax relief for many families (child credits, lower rates, AMT relief, some targeted benefits for military and disability savings) but offsets those gains with limits and removals (SALT cap, tighter mortgage and business loss rules), plus numerous technical and cross‑reference changes that shift taxes between groups and increase compliance complexity.
Middle- and lower-income families receive larger direct tax relief via a $2,000 per qualifying child credit and $500 per other dependent credit, increasing after‑tax income for many households with children.
A lower statutory individual tax rate schedule (e.g., reducing a historical 25% bracket reference toward 22%) and updated rate tables reduce marginal tax rates for many individual taxpayers.
Permanently extends ABLE account rules, 529‑to‑ABLE rollovers, and saver’s credit treatment for ABLE contributions, improving long‑term tax‑favored savings options for people with disabilities and their families.
Taxpayers in high‑tax states face higher federal tax bills due to a $10,000 (/$5,000 MFS) cap on State and Local Tax (SALT) deductions.
Tightening mortgage interest rules and lower acquisition indebtedness caps (e.g., $750,000) reduces the mortgage interest deduction for many homeowners with larger mortgages, increasing taxable income for those taxpayers.
Removal of the allowance for excess business losses for noncorporate taxpayers disallows certain passthrough losses, raising taxes for many sole proprietors and small pass‑through business owners.
Based on analysis of 4 sections of legislative text.
Makes many TCJA individual provisions permanent and revises rate tables, inflation indexing, capital-gains thresholds, personal-exemption rules, SALT limits, mortgage-interest rules, and AMT amounts.
Makes many individual provisions of the Tax Cuts and Jobs Act (TCJA) permanent and adjusts multiple individual-tax rules. It replaces and updates individual income tax rate tables and inflation indexing rules, sets specific dollar thresholds for capital-gains brackets (including a 0% special rule for estates and trusts), redesignates and changes rules tied to personal exemptions (introducing a new statutory reference and a $4,150 per-exemption figure indexed for inflation), fixes the State and local tax (SALT) cap at $10,000 (or $5,000 married filing separately), changes some mortgage-interest rules, and permanently raises and revises Alternative Minimum Tax (AMT) exemptions and phaseouts. Most changes apply to taxable years beginning after enactment and include many technical cross-reference and withholding/levy procedure updates that will affect taxpayers, employers, estates and trusts, and IRS administration.