Tax item |
Current law |
House Bill proposal |
Individual income tax rates |
The top marginal tax rate is 37% for income over $626,350 for individuals and $751,600 for married individuals filing jointly.
Rates are scheduled to increase to pre-Tax Cuts and Jobs Act (TCJA) amounts after 2025.
|
Makes TCJA rates permanent. |
Standard deduction |
The standard deduction for married individuals filing jointly is $30,000. After 2025, the basic standard deduction is scheduled to sunset to pre-TCJA amounts. |
Permanently increases the standard deduction and adds a temporary enhancement for 2025–2028:
|
Personal exemptions |
The TCJA suspended the personal exemption deduction through 2025. |
Permanently eliminates deduction for personal exemptions. |
Child Tax Credit (CTC) |
The maximum child tax credit is $2,000 and only a portion ($1,700) is currently refundable. This credit will revert to $1,000 after 2025. |
|
Pass-through business deduction |
Under Section 199A, individuals, estates, and trusts can deduct 20% of qualified business income from pass-through businesses like partnerships and S corporations, subject to certain limits. |
Makes deduction permanent and increases to 23%, with modifications for specified service businesses. |
Alternative Minimum Tax (AMT) exemption |
The TCJA increased the exemption amounts and the exemption amount phaseout thresholds for the individual AMT. |
Makes higher exemption and phase-out thresholds permanent. |
Mortgage interest deduction |
$750,000 acquisition indebtedness limit (TCJA) expires after 2025. |
Makes $750,000 limit permanent. |
Casualty loss deduction |
Limited deduction to federally declared disasters only (TCJA) through 2025. |
Makes limitation permanent. |
Miscellaneous itemized deductions |
Suspended most personal deductions through 2025 (TCJA); scheduled to return in 2026. |
Permanently terminates deduction. |
Pease limitation (itemized deductions phaseouts) |
Suspended through 2025 (TCJA); scheduled to return in 2026. |
Make permanent the repeal of Pease limitation and impose new limitation for taxpayers in 37% income bracket. |
Moving expenses deduction |
Suspended for most from 2018–2025 (TCJA); returns in 2026. |
Permanently terminates deduction except for military. |
Wagering losses |
Limited to itemized deduction based on the amount of winnings through 2025. |
Makes limitation permanent. |
Charitable deduction for non-itemizers |
Deduction not available after 2021. |
Creates deduction, $150 ($300 joint) through 2028. |
No tax on tips |
Tips are subject to taxation. |
Allows deduction for qualified tips received in certain occupations; deduction expires after 2028. |
No tax on overtime |
Overtime pay is taxable income. |
Allows deduction for qualified overtime compensation; deduction expires after 2028. |
Enhanced deduction for seniors |
Additional standard deduction up to $2,000 is available for those older than 65. |
Adds $4,000 bonus deduction for seniors (2025–2028), phased out at higher incomes. |
No tax on car loan interest |
Personal interest on car loans currently not deductible. |
Allows deduction for up to $10,000 of interest on new car loans; final assembly must take place in United States; both itemizers and nonitemizers benefit. |
Adoption credit |
Credit is nonrefundable. |
Makes $5,000 of the credit refundable. |
529 plan qualified expenses |
Limited to higher education and $10,000 K-12 tuition. |
Expands to include more K-12 and homeschool expenses. |
State and local tax (SALT) deduction |
Currently capped at $10,000. |
Increase cap to $40,000 and contain limitation for incomes over $500,000. |