Key Tax Provisions from the House-Passed One Big Beautiful Bill Act

On May 22, 2025, the House of Representatives passed H.R.1, the One Big Beautiful Bill Act, which includes changes that will affect tax planning for businesses, individuals and estates. These tax provisions would permanently extend, with certain modifications, several individual, pass-through entity and international tax provisions from the Tax Cuts and Job Act of 2017 (TCJA) that are currently set to expire at the end of this year.

Below are several key provisions from the House bill as currently proposed. The One Big Beautiful Bill Act now moves to the Senate for consideration. Please note that these provisions are subject to change and may be amended before the bill becomes law.

Business Tax Provisions

Businesses may be affected by the following tax provisions:

Base-Erosion and Anti-Abuse Tax (BEAT) under Section 59A: Increases the current rate from 10% to 10.1% instead of rising to 12.5% after 2025.
Bonus Depreciation for Qualified Property: Reinstates 100% bonus depreciation for qualified personal property placed in service between January 20, 2025, and December 31, 2029. Also permits an immediate 100% deduction for the cost of “qualified production property” (nonresidential real property used as an integral part of manufacturing, production or refining tangible personal property) placed in service before January 1, 2033.
Business Loss Limitations Under Section 461(l): Makes the excess business loss limitation for noncorporate taxpayers permanent and adjusts how carried-forward losses affect future-year limits.
C-Corporation Charitable Deductions: Requires C-corporations to contribute at least 1% of their taxable income to be eligible for a deduction.
Employee Retention Credit (ERC) Refunds: InvalidatesERC claims filed after January 31, 2024, regardless of previous deadlines.
Expansion of Childcare Credits: Increases employer-provided childcare credits from 25% to 40% (50% for eligible small businesses) and increases the maximum annual credit from $150,000 to $500,000 for employers ($600,000 for eligible small businesses).
Interest Deduction Limit under Section 163(j): Reinstates the addback of depreciation and amortization on business interest expenses for tax years 2025 through 2029.
Qualified Business Income (QBI) Deductions (Section 199A): Permanently increases the QBI deduction from 20% to 23% for qualified business income and increases eligibility for certain specified service trades and businesses for tax years beginning after December 31, 2025.
Research and Experimental Expenses under Section 174: Reinstates the deduction for domestic research and experimental expenses incurred for 2025 through 2029.
Section 179 Expenses: Increases the maximum amount that can be deducted to $2.5 million with phaseout starting at $4 million.

Individual Tax Provisions

There are several proposed changes affecting individuals, including:

Child Tax Credit: Increases the maximum credit to $2,500 per child from 2025 to 2028.
Deductions for Auto Loan Interest: Temporarily allows a deduction of up to $10,000 on American-made vehicle loan interest payments taken out from 2025 through 2028, with deductions phasing out for single taxpayers at $100,000 and for married filing jointly at $200,000.
Estate and Gift Exemption: Permanently increases the estate and gift tax exemption to $15 million for taxable years beginning after December 31, 2025, and indexes this exclusion for inflation.
Expansion of Qualified Tuition Programs: Expands 529 accounts to include tuition and material expenses for elementary, secondary and home school expenses along with postsecondary credentialing expenses.
Form 1099-K: Repeals the $600 threshold for Form 1099-K, reinstating to the previous threshold of more than $20,000 and 200 transactions.
Form 1099-MISC and 1099-NEC: Increases reporting threshold from $600 to $2,000 and is indexed for inflation after 2026.
Itemized Deduction Cap: Permanently changes and limits certain itemized deductions and puts a new limitation on itemized deductions for taxpayers in the highest tax bracket.
Newborn Money Accounts for Growth and Advancement: Allows parents to open federally funded accounts for babies born between January 1, 2025, and January 1, 2029, and receive $1,000 from the Treasury in that account.
Tip and Overtime Compensation Deductions: Temporarily allows deductions for qualified tips and overtime compensation for tax years 2025 to 2028, except for highly compensated employees ($160,000 in 2025).
State and Local Tax (SALT) Cap: Increases the $10,000 limit on the SALT deduction to $40,000 for 2025 for taxpayers with modified adjusted gross income under $500,000 with both thresholds increasing annually by 1% from 2026 to 2033.
Seniors 65 and Over: Creates a $4,000 standard deduction increase for seniors aged 65 and over, which phases out at a 4% rate for single filers making over $75,000 and married filers making over $150,000.
Standard Deduction: Temporarily increases the standard deduction for tax years 2025 through 2028, by $1,000 for single filers, $1,500 for head of household and $2,000 for joint filers.

Energy Provisions

The House Bill also includes energy tax provisions:

Clean Vehicle and Electric Vehicle (EV) Credits: Eliminates the maximum $7,500 tax credit for individuals to purchase certain new electric and hybrid vehicles starting in 2026. If a manufacturer has sold fewer than 200,000 clean vehicles as of December 31, 2025, then the credit could be claimed in 2026. The credit will be fully terminated by 2027.
Renewable Energy Credits: Repeals several renewable energy credits, including residential solar and wind credits, after 2025.
Residential Clean Energy Credit: Eliminates the Residential Clean Energy Credit after 2025.

Brown Plus will keep clients up-to-date on final tax provisions once the One Big Beautiful Act passes the Senate. If you have any questions regarding the proposed tax provisions, please contact a Brown Plus tax advisor.