State and Local Tax Deduction Limitation (SALT Cap):

• Increased to $40,000 ($20,000 for married filing separately)

• Indexed for inflation through tax year 2029

• Reverts to $10,000 ($5,000 for married filing separately) after 2029

• Phase-down for modified AGI over $500,000, reducing the $40,000 limit by 30% of excess income, not below $10,000

Pass-Through Entity Tax (PTET) Elections:

• No new limitations imposed on PTET elections

Excess Business Loss (EBL) Limitations:

• Current limitations on business losses used to offset other income are made permanent

• EBLs continue to be treated as net operating losses (NOLs)

Personal Income Tax Rates:

• TCJA tax rates and brackets made permanent effective after December 31, 2025

• Adjustments continue annually for inflation

Standard Deduction:

• Permanent extension of TCJA standard deductions

• Further increased to:

  • $15,750 for single filers

  • $23,625 for head of household

  • $31,500 for married filing jointly

• Adjusted for inflation after 2025

Itemized Deductions:

• Simplifies the overall limitation

• Eliminates most miscellaneous itemized deductions

• Expands educator expense deductions

• Introduces a percentage cap on deductions for high-income taxpayers

Personal Exemptions:

• Permanently eliminates personal exemptions

• Introduces a temporary $6,000 senior deduction for individuals over age 65

• Phases out at $75,000 modified AGI ($150,000 married filing jointly)

Alternative Minimum Tax (AMT):

• Increased exemption and phaseout thresholds made permanent effective December 31, 2025

• Phaseout thresholds revert to 2018 levels of $500,000 (single) and $1,000,000 (joint), indexed for inflation

• Exemption phases out faster for high-income taxpayers

Child Tax Credit:

• TCJA increased child tax credit made permanent

• Additional child tax credit set at $1,700 in 2025, adjusted for inflation

• Nonrefundable credit increases to $2,200 effective 2026

Charitable Deductions:

• Beginning in 2026, non-itemizers can deduct up to $1,000 ($2,000 married filing jointly) for charitable donations

• For itemizers, contributions deductible to extent they exceed 0.5% of AGI, with carryforward allowances

• 60% AGI limitation for cash contributions to public charities is made permanent

Tips and Overtime Pay Deductions:

• Above-the-line deductions allowed for 2025–2028 tax years

• Up to $25,000 for tips per individual

• Up to $12,500 for overtime pay per individual ($25,000 for joint filers)

• Subject to AGI phaseouts

Individual Trust Accounts (“Trump Accounts”):

• New tax-favored accounts for children under age 18

• Annual contribution limit of $5,000

• One-time $1,000 government deposit for qualifying children born between Dec. 31, 2024, and Jan. 1, 2029

• Employers can make tax-free contributions annually

• Funds may be used for education, small business investments, or first home purchases

Qualified Elementary and Secondary Scholarships Tax Credit:

• Tax credit equal to qualified contributions to scholarship-granting organizations

• Includes various requirements and restrictions