Easy-reference chart: How the OBBB changed tax rules in 2025

Provision

After the One Big Beautiful Bill Act

Pre-OBBB law

Bonus depreciation

100% bonus depreciation is permanent for property acquired and placed in service after January 19, 2025.

Bonus depreciation was 40% in 2025, 20% in 2026, and 0% in 2027. This still applies to property acquired before January 20, 2025.

R&D expensing (Section 174)

Full expensing for domestic R&E
expenses in the year they are paid or occur. Method changes are available to accelerate TCJA domestic amortization and small business acceleration options. Foreign R&E expenses continue to be capitalized and amortized over 15 years.

Domestic R&E expenses were capitalized and amortized over five years (15 years for foreign expenses).

Qualified production property

Elective 100% expensing for owner-occupied portions of buildings integral to some types of production.

N/A

Section 179D

Sunsets for property with construction beginning after June 30, 2026.

Deduction of up to $5.94 per square foot

Section 45L

Sunsets for dwelling units acquired after
June 30, 2026.

Credit up to $5,000 per dwelling unit

State and local tax deduction (SALT)

$40,000 cap for married filing jointly that phases out at incomes above $500,000.

$10,000 cap

Energy efficient commercial buildings deduction (Section 179)

$2.5 million expensing limit; $4 million phase-out threshold; inflation indexing resets to 2024; effective for property placed in service after December 31, 2024.

$1.25 million expensing limit; $3.13 million phaseout threshold; indexed for inflation based on 2019.

Flow-through deduction (Section 199A)

20% and now made permanent.

20%

Interest deductions (163J)

Switches back to tax EBITDA-based limit; expanded floor plan financing interest

Tax EBIT-based limit

Clean electricity production (Sections 48E and 45Y)

If construction begins before July 5, 2026, solar and wind projects generally must be placed in service by the end of 2030 to qualify for the credit. If construction begins after that date, they must be placed in service by the end of 2027 to qualify for the credit. Restrictions for credits related to prohibited foreign entities.

Projects eligible if placed in service no earlier than 2032.

Advanced manufacturing credit

35% for properties placed in service after 2025

25%

Estate tax exemption

$15 million per individual ($30 million married). This is now permanent, effective January 1, 2026, with automatic inflation indexing.

$13.99 million per individual ($27.98 million married) and was set to revert on 1/1/2026 to ~$5-7 million (inflation-indexed).

Standard deduction

$15,750 (single) and $31,500 (married)

$15,000 (single) and $30,000 (married)

Child tax credit

$2,200 per child (refundable portion increased and indexed for inflation).

$2,000 per child

No tax on tips and overtime

Qualified individuals deduct up to $25,000 in qualified tips. Up to $12,500 deduction for qualified overtime ($25,000 for married).

N/A

Auto loan interest deduction

Up to $10,000 for U.S.-made vehicles
(phasing out above $100,000 single or $200,000 married).

N/A

Adoption credit

$5000 of the current $17,280 credit is refundable (adjusted for inflation,
prospectively).

Up to $17,280, non-refundable

Deductions for seniors

$6,000 for over age 65 (individuals), begins phasing out above $75,000 single or $150,000 married. Phases out entirely above $175,000 or $250,000. Temporary from 2025-2028. The prior $1600 deduction remains in existence.

$1,600 for age 65+

Form 1099-K

$20,000 and over 200 transactions

$2,500