House Passes Major Tax Overhaul Making 2017 TCJA Provisions Permanent

On July 3, the House narrowly passed a sweeping Republican-backed tax bill that cements most of the 2017 Tax Cuts and Jobs Act (TCJA) provisions into permanent law, well ahead of their scheduled expiration at the end of 2025. The vote passed 218–214, with two Republicans opposing the measure. President Trump is expected to sign the bill into law on July 4.

Congress just passed a new tax bill.

Key Tax Changes for Individuals and Businesses

The legislation locks in lower individual tax rates, expands the standard deduction, increases the child tax credit, and raises the estate tax exemption. Business owners will see permanent tax breaks as well, including full expensing, 100% bonus depreciation, and the 20% passthrough deduction.

The cap on state and local tax (SALT) deductions will temporarily increase to $40,000 through 2029 before reverting to $10,000. Additionally, the bill includes some of Trump’s tax priorities, such as relief for tip income and overtime pay.

Energy Credit Revisions and Executive Promises

Energy tax provisions were a sticking point during negotiations. While the bill scales back several clean energy incentives introduced in the Inflation Reduction Act, some Republicans pushed for further rollbacks. Trump reportedly pledged to use executive authority to limit the impact of remaining clean energy subsidies, helping to secure key votes.

Some clean energy tax credits—including for electric vehicles—will be eliminated or phased out under revised timelines. A Senate-added “safe harbor” provision allows certain wind and solar projects to remain eligible if construction begins within a year of the law’s enactment.

New Provisions and Revenue Impact

Beyond making TCJA provisions permanent, the bill introduces new measures, such as:

• A $1,000 federal contribution to tax-advantaged “Trump accounts” for children born between 2025 and 2028.

• A $200 increase to the child tax credit, which will now adjust for inflation.

• Higher tax rates on foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI).

• Expanded charitable deductions for Alaskan whaling expenses.

• A higher asset cap for real estate investment trusts (REITs) held through taxable subsidiaries.

• An exemption for oil and gas companies’ intangible drilling costs from the corporate AMT calculation.

  
  

The Congressional Budget Office estimates the legislation would increase the federal deficit by $3.4 trillion over the next decade.