On Friday, May 9, the Ways and Means Committee shared partial text for the tax portion of a reconciliation bill to extend the 2017 Tax Cuts and Jobs Act and make other tax reforms. The committee is expected to release additional text before a markup set for 2pm on May 13.
The released text includes provisions to:
- make the TCJA regular income tax rate schedules for individual, estates, and trusts rates permanent, and provide inflation relief for all but the top bracket
- make the TCJA increases to the standard deduction permanent, with additional increases through 2028
- increase the Child Tax Credit to $2,500 through 2028, and make permanent the $1,400 inflation adjusted Additional Child Tax Credit (after 2028, the Child Tax Credit will permanently drop to $2,000, indexed for inflation)
- increase the Section 199A pass-through deduction to 22%, make the deduction permanent, and extend it to certain qualified business development company interest dividends
- set the estate tax exemption at $15 million permanently, with inflation adjustment
- make the $750,000 limitation on home mortgage acquisition indebtedness permanent
- make permanent a 50% deduction for global intangible low-taxed income (GILTI) and a 37.5% deduction for foreign-derived intangible income (FDII)
- repeal provisions that would have increased the rate of base erosion and anti-abuse tax (BEAT) liability to 12.5%
The Joint Committee on Taxation has released an analysis of all provisions in the partial text, available at https://www.jct.gov/publications/2025/jcx-18-25/. The JCT also has calculated the provisions would add over $4.9 trillion to the deficit over 10 years. (See https://www.jct.gov/publications/2025/jcx-19-25/)
Still missing from the draft are provisions on the state and local tax (SALT) deduction cap, Inflation Reduction Act energy credits, and more.
Checkpoint will share updates as they become available.
We want to hear from you. Checkpoint’s Federal Tax Update staff invites comments from members of the tax community on how these proposals may affect tax practice and individual or business clients, as well as the federal budget and U.S. economy.
Please refer responses to Tim Shaw ([email protected]) and Maureen Leddy ([email protected]).
Take your tax and accounting research to the next level with Checkpoint Edge and CoCounsel. Get instant access to AI-assisted research, expert-approved answers, and cutting-edge tools like Advisory Maps and State Charts. Try it today and transform the way you work! Subscribe now and discover a smarter way to find answers.
