OBBB Effective Dates for Individuals
Posted by Amanda Ornowski on August 14, 2025
The One Big Beautiful Bill (OBBB), signed into law on July 4, 2025, introduces a wide range of tax changes for individuals, some permanent and others set to expire by December 31, 2028. These changes amend and extend portions of the Tax Cuts and Jobs Act (TCJA) and roll out on a staggered timeline.
Highlights for Tax Year 2025
- 529 Plan Expansion: Distributions broadened starting 7/4/25
- Clean Vehicle Credits: End 9/30/25 for commercial, new, and used clean vehicles
- Child Tax Credit: Increased to $2,200 per child, with $1,400 refundable (permanent)
- Temporary Deductions (2025–2028):
- SALT deduction cap raised to $40,000
- $6,000 deduction for seniors aged 65+
- Deductions for cash tips (up to $25,000) and overtime pay (up to $12,500)
- Auto loan interest deduction (up to $10,000) for U.S.-assembled vehicles
- Trump Accounts for children born between 1/1/25–12/31/28 (contributions begin 7/4/26)
Highlights for Tax Year 2026 and Beyond
- Estate & Gift Tax Exemption: Raised to $15 million
- Section 199A Deduction: Extended with revised phase-ins
- Charitable Giving: Above-the-line deduction of $1,000 ($2,000 MFJ) for cash donations
- Casualty Losses: Expanded to include state-declared disasters
- Mortgage Interest Deduction: Continues with $750,000 cap
- Miscellaneous Deductions: Permanently removed (except unreimbursed educator expenses)
- New Limits: On itemized deductions and higher AMT thresholds
- Charitable Deduction Floor: Set at 0.5% of AGI
Additional Key Dates
- Energy Credits: End 12/31/25 for home improvements and residential clean energy
- Commercial Energy Deductions: End 6/30/26
- Qualified Opportunity Zones: Made permanent with changes starting 1/1/27
- Clean Electricity Credits:
- Wind & solar: End 12/31/27
- Other facilities: End 12/31/32
For personalized guidance on how these changes may impact your tax situation, contact your Lumsden McCormick advisor.
Download a two-page summary of Effective OBBB Dates for Individual Taxpayers here.
Download a one-page summary of Effective OBBB Dates for Businesses here.
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Amanda joined the Lumsden team in 2021 and has over 15 years of experience in the accounting industry. Her background spans both public accounting and corporate tax, allowing her to offer a well-rounded perspective on tax and financial planning. Amanda works closely with high-net-worth individuals and multi-generational families, delivering tailored, comprehensive solutions to address their tax and financial needs. She specializes in business and individual tax consulting, with a focus on professional services, retail and manufacturing industries, as well as investment partnerships and family foundations.