Overview
- Treasury and IRS plan to publish notices of proposed rulemaking to define industry eligibility for the $25,000 capped tip deduction and the $12,500 overtime deduction before the year-end filing season.
- Agency officials are overhauling tax forms and collection processes to integrate the new above-the-line deductions into current-year filings.
- The broader components of the One Big Beautiful Bill Act—including the five-year SALT cap increase to $40,000, permanent mortgage interest deduction, and 12% boost to the LIHTC—have taken immediate effect.
- The legislation’s child-focused “Trump Accounts” pilot is now live, providing a one-time $1,000 federal seed contribution to youth savings accounts for children born through 2028.
- Implementation challenges such as defining eligible sectors and accounting for halfway-through-the-year filings underscore debates over the law’s complexity, cost and equity implications.