Factbox-What’s in Trump’s tax-cut bill making its with through the US Congress?
By Andy Sullivan and Bo Erickson
WASHINGTON (Reuters) -U.S. Senate Republicans are moving forward on President Donald Trump’s sweeping tax-cut and spending bill that includes major elements of his domestic agenda.
The Senate advanced the bill and is set to consider numerous amendments before final passage. The bill will then return to the Republican-controlled House of Representatives for final passage before Trump can sign it into law. Here are some details of what is in the bill:
TEMPORARY VS. PERMANENT TAX BREAKS
The nonpartisan Congressional Budget Office estimates that the version of the bill the Senate moved ahead on Saturday night will add about $3.2 trillion to the nation’s debt over the next decade. That’s higher than the estimated $2.8 trillion cost of the version of the bill passed by the House last month, largely because the Senate version makes permanent an array of tax cuts that the House version would have allowed to expire in a few years.
TAX CURRENT HOUSE VERSION SENATE
BREAK LAW VERSION
Child $2,000 Raised to Permanent
tax per $2,500 increase to
credit child, through 2028, $2,200,
drops to then reverts indexed to
$1,000 to $2,000, inflation.
in 2026 indexed for
inflation.
Standard $30,000 Temporary Permanent
deductio for increase to increase to
n married $32,000 $32,000 for
couple, through 2028, married
drops by back to couples
about $30,000 after starting in
half in that. 2026
2026
Business Amortize 100% 100%
research d over 5 expensing for expensing for
and years, domestic domestic
developm 15 years research research
ent for through 2029, permanently
costs foreign then reverts
research
Bonus 40% this 100% through 100%
deprecia year, 2029, then permanently
tion for 20% in phases out
business 2026, 0%
equipmen after
t that
purchase
s
Business Up to Expands this Expands this
interest 30% of break to break to
expenses earnings include include
before depreciation EBITDA
interest and permanently
and amortization
taxes (EBITDA)
(EBIT) through 2029
STATE AND LOCAL TAX DEDUCTION
The Senate version raises to $40,000 the maximum deduction for state and local tax payments, with annual inflation adjustments. That deduction will revert to its current $10,000 level after 2029. An earlier version agreed to in the House would have kept the deduction at $40,000 after 2026.
DEDUCTION FOR OLDER AMERICANS
The Senate bill would provide a federal income tax deduction of $6,000 per year for people over 65, the earlier House version would have offered a $4,000 deduction. Both would end after 2028.
NO TAX ON TIPS
The Senate bill would provide a deduction of up to $25,000 for tipped income through 2028. The House version would not cap the deduction.
RETALIATORY (SECTION 899) TAX
Both the House and Senate initially included a provision that would have allowed the U.S. to impose new taxes on residents, businesses and other entities from countries that are found to impose "unfair foreign taxes."
However, this section was removed after advice from Treasury Secretary Scott Bessent, who said his tax negotiations with G7 nations were progressing.
DEBT CEILING
The Senate bill would raise the nation’s debt ceiling by $5 trillion; the House version had called for a $4 trillion increase. Congress must act on this by sometime this summer or risk triggering a default on the nation’s $36.2 trillion in debt.
CLEAN ENERGY PROJECTS
The Senate bill would roll back clean-energy incentives created by President Joe Biden’s 2022 Inflation Reduction Act, effectively repealing the incentives for solar and wind immediately. The Senate language also proposes a new tax on these projects if they cannot prove their products are made without Chinese parts, as well as a new tax break for coal production.
MEDICAID
Both bills would clamp down on "provider taxes," which states levy on Medicaid providers as a way to boost federal funding. The Senate version delays the implementation of these changes until 2028, when these provider taxes would start to gradually decrease. The Senate also included an extra $25 billion for rural hospitals after several Republican senators balked at how these changes could impact providers in their states.
SPORTS TEAMS
The Senate version does not include language from the House bill that would have cut a tax break for sports-team owners in half.
COURTS
The current version of the Senate bill omits language meant to limit U.S. judges’ power to block federal policies nationwide, after the nonpartisan Senate parliamentarian ruled the policy does not align with the chamber’s rules for this specific budget process.
