- Extends Trump-era tax cuts permanently while imposing cuts to healthcare and aid programs.
Delivers new tax breaks for parents, seniors, workers, and car buyers—but with caveats.
Tightens rules for programs like Medicaid and SNAP, raising potential costs for states and individuals.
A nearly 900-page Republican tax bill is headed for President Biden’s desk after passing the House, cementing one of the biggest overhauls of the U.S. tax code in years. The legislation makes permanent the individual tax cuts originally enacted under President Trump in 2017, while introducing new tax breaks and significant changes to federal spending on healthcare, food assistance, and student aid programs.
Consumer advocates denounced the measure. “This is certainly one of the cruelest bills in American history, backtracking on the country’s painfully slow history of expanding health care coverage and, equally remarkably, taking food away from the hungry," said Robert Weissman, co-president of Public Citizen.
"The bill will strip health coverage from 17 million Americans and put food assistance at risk for upwards of 5 million Americans."
But Department of Housing and Urban Development (HUD) Secretary Scott Turner said the measure "will revitalize and uplift rural, tribal, and urban communities across America, delivering the largest deficit reduction in decades, providing the biggest tax cut ever for working-class Americans, and expanding the benefits of Opportunity Zones so this transformative policy can have an even greater impact.
"The One Big Beautiful Bill is a massive victory for the American worker, the American small business owner, and the American family, and it’s just the beginning of America’s Golden Age.”
“Slashing vital programs that protect civil rights, consumer protections, health care, and education for working families to benefit the rich and powerful is wrong,” said Richard Dubois, executive director of the National Consumer Law Center. “The massive cuts to the Consumer Financial Protection Bureau buried in the bill further empower large corporations over people.”
Stricter Rules for Medicaid and SNAP
The legislation imposes work requirements for Medicaid enrollees, mandating 80 hours of work per month for many able-bodied adults starting in late 2026. States that expanded Medicaid would also have to charge modest fees for some services for enrollees with slightly higher incomes.
Recipients of Supplemental Nutrition Assistance Program (SNAP) benefits will face stricter work rules as well. The age threshold for mandatory work requirements rises to 65, and states will be expected to contribute more to SNAP funding starting in 2028, potentially straining state budgets.
EV Credits on the Chopping Block
Shoppers considering an electric vehicle (EV) purchase may feel the squeeze. The bill ends tax credits for new and used EVs after Sept. 30, and eliminates credits for home charging stations after June 2026. However, buyers of U.S.-made cars could deduct up to $10,000 in auto loan interest through 2028, with income limits applying.
Bigger Deductions in High-Tax States
For residents in high-tax states, the bill offers some relief by raising the maximum state-and-local-tax (SALT) deduction to $40,000, up from the current $10,000 cap. This higher cap would grow by 1% annually through 2029 before reverting to $10,000 in 2030. However, the benefit phases down for households earning more than $500,000, limiting the boost for wealthier taxpayers.
New Perks, New Limits for Parents
Families stand to gain from an increase in the child tax credit, which would rise from $2,000 to $2,200 starting in 2026 and be permanently indexed to inflation. The legislation also establishes “Trump Accounts” for children born between 2025 and 2028, seeding each account with a $1,000 government contribution. Families could contribute up to $5,000 annually, with funds accessible in adulthood.
At the same time, the bill tightens borrowing rules for parents with college-age children. Parent Plus loans would face new caps—$65,000 total and $20,000 per year—and would be excluded from income-driven repayment plans after mid-2026.
Seniors and Workers
Americans over 65 would gain a new tax deduction of up to $6,000 for individuals (or $12,000 for couples) between 2025 and 2028, available to those earning $75,000 or less. The benefit tapers off for higher incomes.
Workers could also benefit from temporary deductions. Those earning tips may deduct up to $25,000 in tip income from their federal taxable income, while people working overtime could deduct up to $12,500—or $25,000 for married couples—from 2025 to 2028, provided they earn less than $150,000.
New Loan Restrictions for Students
For students, the bill spells tighter lending limits. The popular Grad Plus program allowing graduate students to borrow up to the full cost of attendance will end in 2026. Instead, graduate students will face annual borrowing caps of $20,500, while professional students in fields like medicine or law can borrow up to $50,000 annually. Overall borrowing would also face new lifetime limits.
The bill also replaces current income-contingent repayment plans with two options: a fixed-payment plan of 10 to 25 years, or a Repayment Assistance Plan based on income but stretching to 30 years. Meanwhile, private colleges with large endowments could see higher taxes, although institutions with fewer than 3,000 students would be exempt.
While Republicans tout the bill as a pro-growth, pro-family package, critics warn it could deepen inequality and increase financial pressure on vulnerable Americans. The full fiscal impact is likely to emerge as provisions phase in over the coming years.