The new law extends and expands ABLE account rules. ABLE accounts are tax-advantaged savings accounts for people with disabilities. Generally, the ABLE accounts are subject to Roth treatment—i.e., contributions are made with after-tax money, but distributions (that comply with specific ABLE account rules) are tax-free.

As enacted into law, H.R.1 expands the ways 529 education savings plans can be used. For example, 529 plan funds can now be used for public or private (including religious) elementary and secondary school expenses. And certain accreditation programs (e.g., trade schools, certificate programs) will now also qualify for tax-free 529 plan payments. On student loans, the new law extends the exclusion from tax liability of employer-paid student loan payments and allows tax-free discharge of student loan debt in the case of death or disability.

On June 25, the House Education & the Workforce Committee approved two health insurance bills that supporters say will increase small business access to affordable health insurance coverage. Committee approval came on party-line votes.

On June 20, the Centers for Medicare and Medicaid Services (CMS) issued a final rule (RIN 0938-AV61) that reduces by two weeks the time period during which individuals can enroll in Affordable Care Act (ACA) exchange-based health insurance plans. The rule also eliminates the ability of people with incomes of less than 150 percent of the federal poverty level to enroll in monthly ACA coverage.

The Treasury Department’s annual report, issued June 18, on the state of the Social Security and Medicare trust funds projects that the two safety-net programs will run out of enough money to pay current benefits a year earlier than had been projected last year.

On a party-line vote on June 26, the Senate confirmed the nomination of Ken Kies to be assistant secretary for tax policy. The 53 to 45 vote puts Kies in a key position as Treasury must promulgate implementing regulations for a raft of new tax rules signed into law on July 4.

On May 23, by a narrow 215 to 214 vote after an all-night debate, the House of Representatives passed the $6+ trillion reconciliation bill, H.R.1. The Congressional Budget Office (CBO) projects that the measure as passed by the House would, over 10 years, add $2.42 trillion to the federal deficit. H.R.1 contains a $3.8 trillion tax package. CBO also projected that Trump tariffs would reduce the deficit by $2.5 trillion over 10 years.

The Senate is now working on its version of reconciliation (tax) legislation, expecting to make multiple changes to H.R.1, the bill the House passed just before Memorial Day. Here are some of the issues that Republican Senators are considering.

The House-passed reconciliation bill, H.R.1 contains a provision increasing the Section 199A deduction for qualifying non-corporate business income from 20 percent to 23 percent There is no expiration date on the provision, which also contains modifications to eligibility for use of the deduction.

H.R.1, the budget reconciliation bill approved by the House on May 23, includes a provision that permanently increases the estate tax exemption to $15 million ($30 million for married couples). The $15 million exemption amount is indexed for inflation with a base year of 2025.

A “tax-the-rich” provision in the House-passed reconciliation bill would reduce the value of itemized deductions for 37 percent taxpayers. The provision would replace current law’s Pease limitation on the value of itemized deductions.

The House-passed tax package includes a number of enhancements to the rules governing health savings accounts (HSAs). These provisions are not subject to an expiration date—they would take effect in 2026.

The House-passed tax bill provides a temporary additional deduction of $4,000 for those over age 65 who have less than $75,000 ($150,000 for married couples) in taxable income. It also temporarily expands the standard deduction by $2,000 (married)/$1,000 (single taxpayers).

Included in H.R.1 are provisions that would create new tax-favored savings accounts, Trump Accounts, for children. It also includes creation of a pilot program under which there would be a one-time government contribution to Trump Accounts.

The House-passed budget reconciliation bill includes a temporary bonus depreciation provision that allows a 100 percent deduction (rather than several years of partial deductions to reflect amortization of the cost of the property) for qualified property acquired and placed in service by a business.

H.R.1 modifies the rules for calculating the amount of interest paid on business loans. The result is for many businesses an increase in the amount of business loan interest that is deductible from taxable income.

The House-passed reconciliation budget bill, H.R.1, contains a provision that would make certain overtime (OT) pay free from income tax, but not from payroll (Social Security/Medicare) taxes. This tax relief provision is limited both by income and by the Fair Labor Standards Act’s (FLSA’s) definition of qualified overtime hours.

The House-passed budget reconciliation bill includes a new two-year credit for employers that enroll their workers in a new health care program, CHOICE arrangements. The credit would be equal to $100 multiplied by the number of months for which each employee is enrolled in a CHOICE program in the first year, and $50 by the number of months each employee is enrolled in the program in the second year.

The House-passed budget reconciliation bill includes a permanent extension of the tax credit available to employers offering qualified paid family and medical leave programs. It also modifies the tax credit to allow employers to claim the tax credit for the cost of private insurance that covers the cost of paid family and medical leave.

On May 28, the Department of Labor’s (DOL’s) Employee Benefits Security Administration (EBSA) announced it has rescinded its 2022 compliance guidance that discouraged retirement plan fiduciaries from including cryptocurrency options in retirement plan investment choices. The EBSA announcement specified that the agency is “neutral” on the issue of recommending inclusion of crypto in retirement plan investment options.