On July 4, President Trump signed into law H.R.1, the $3.3 trillion budget reconciliation spending and tax cuts bill. The Senate passed the measure on July 1, by a 50-50 vote with the tie broken by Vice President JD Vance. The Senate made a raft of changes to the version the House passed on May 22. The House approved the Senate-passed measure, without changes, on July 3, by a 218 to 214 vote. Enactment came after multiple all-night, high-drama, tension-filled days as Congress raced to meet their target July 4 date for signing the measure into law.
3 min read
H.R.1 Signed into Law
By NAIFA on 7/15/25 11:00 AM
Topics: Legislation & Regulations Tax Reform
1 min read
Section 199A Deduction for Noncorporate Business Income Now Permanent
By NAIFA on 7/15/25 10:56 AM
H.R.1, which is now the law of the land, permanently extends the 20 percent deduction for qualifying noncorporate business income (QBI).
The end result came after a rollercoaster of a journey through the legislative process. The House version increased the deduction to 23 percent and added restrictions on eligibility for the deduction. The Senate version dropped the deduction back to 20 percent and ultimately dropped new restrictions on eligibility for the deduction.
Topics: Legislation & Regulations Small Business Tax Reform
1 min read
New Law Makes Permanent Enhanced Business Loan Interest, Depreciation Rules
By NAIFA on 7/15/25 10:53 AM
The new law makes permanent enhanced business loan interest and depreciation rules. The Senate version, which was enacted into law, changed the House version of the bill that enhanced interest deductibility and depreciation rules for only five years.
Topics: Legislation & Regulations Tax Reform
Tax Package Increases Estate Tax Exemption
By NAIFA on 7/15/25 10:51 AM
H.R.1, the budget reconciliation bill enacted into law on July 3, includes a provision that permanently increases the estate tax exemption to $15 million ($30 million for married couples). The base year for indexing the $15 million exemption amount was changed to 2025.
Topics: Legislation & Regulations Estate Planning Tax Reform
1 min read
Income-Limited Tax Break for Some Seniors Approved
By NAIFA on 7/15/25 10:49 AM
Now law is a new five-year $6,000 deduction for some seniors. The Senate version of H.R.1, which has been enacted into law, creates a $6,000 special deduction from income, but not Social Security, for taxpayers over age 65 with incomes of $75,000 ($150,000/married) or less. The deduction phases down (but not below zero), at the rate of six percent of the amount by which a single taxpayer’s income exceeds $75,000 ($150,000/married filing jointly). The deduction is good for 2025 through 2028.
Topics: Legislation & Regulations Tax Reform
1 min read
Reconciliation Bill Restricts Itemized Deduction Values for Wealthy
By NAIFA on 7/15/25 10:47 AM
A “tax-the-rich” provision in the new law reduces the value of itemized deductions for 37 percent taxpayers. The provision would replace current law’s Pease limitation on the value of itemized deductions.
Topics: Legislation & Regulations Tax Reform Charity
1 min read
Health Savings Accounts Expansion Scaled Back in New Tax Package
By NAIFA on 7/15/25 10:44 AM
The new law excludes a number of enhancements to the rules governing health savings accounts (HSAs) that had been in the House-passed version of H.R.1. Two expansion provisions did make it into the new law, though: qualification of Affordable Care Act (ACA) bronze and catastrophic plans as a high-deductible health plan (HDHP) that allows a person to have an HSA and a provision that permits telehealth without triggering higher copayments or deductibles.
Topics: Legislation & Regulations Health Savings Accounts
1 min read
New Law Exempts Some Overtime Pay from Income Tax
By NAIFA on 7/15/25 10:42 AM
The new law provides that individuals earning up to $150,000/year ($300,000/married) will not pay income tax on up to $12,500 ($25,000 married) in overtime (OT) pay. This tax break takes effect this year (2025) and expires at the end of 2028.
Topics: Legislation & Regulations Tax Reform
1 min read
Employer Paid Leave Tax Credit Included in New Law
By NAIFA on 7/15/25 10:40 AM
H.R.1 as enacted into law extends the tax credit for employer-provided paid leave. Plus, the new law expands the tax credit by allowing employers to choose whether to take the deduction based on leave taken, or on the premiums paid for insurance that provides paid leave benefits.
Topics: Legislation & Regulations Taxes
1 min read
H.R.1 Would Create New Tax-Favored Savings Accounts for Children
By NAIFA on 7/15/25 10:38 AM
Included in H.R.1 as enacted into law 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.
Topics: Legislation & Regulations Savings
1 min read
ABLE Account Rules Extended, Modified by New Law
By NAIFA on 7/15/25 10:35 AM
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.
Topics: Legislation & Regulations
1 min read
New Law Includes Student Loan, 529 Plan Changes
By NAIFA on 7/15/25 10:33 AM
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.
Topics: Legislation & Regulations
1 min read
House Committee Approves Bills to Expand Small Business Access to Health Insurance
By NAIFA on 7/15/25 10:30 AM
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.
Topics: Health Care Legislation & Regulations Small Business
1 min read
CMS Reduces ACA Open Enrollment Period
By NAIFA on 7/15/25 10:27 AM
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.
Topics: Health Care Affordable Care Act
1 min read
Medicare and Social Security Trust Funds to Run Dry a Year Earlier
By NAIFA on 7/15/25 10:25 AM
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.
Topics: Medicare Social Security
1 min read
Senate Confirms Kies as Assistant Secretary for Tax Policy
By NAIFA on 7/15/25 10:22 AM
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.
Topics: Taxes
3 min read
House Approves Reconciliation Bill
By NAIFA on 6/13/25 11:21 AM
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.
Topics: Legislation & Regulations Congress Tax Reform
2 min read
Senate Contemplates Changes to House-Passed Reconciliation Bill
By NAIFA on 6/13/25 11:19 AM
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.
Topics: Legislation & Regulations Congress Tax Reform
3 min read
H.R.1 Expands and Makes Permanent Section 199A
By NAIFA on 6/13/25 11:16 AM
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.
Topics: Legislation & Regulations Tax Reform
1 min read
Tax Package Increases Estate Tax Exemption
By NAIFA on 6/13/25 11:13 AM
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.
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