OBBBA 2026: What Changed for Your Taxes
The One Big Beautiful Bill Act (OBBBA), enacted July 2025, permanently extended the TCJA framework and added several temporary 2025–2028 deductions. Below are the figures that matter for 2026 filing, sourced to the IRS and the statute.
Updated 2026-08-11 · figures retrieved 2026-08-11 from IRS Rev. Proc. 2025-32 and Pub. L. 119-21.
Direct answer
OBBBA made the TCJA brackets and the 2026 standard deduction ($$16,100 single /$32,200 joint / $24,150 HoH) permanent, raised the SALT cap to $40,400, and added temporary 2025–2028 breaks: no-tax-on-tips up to $25,000, no-tax-on-overtime up to $12,500/$25,000, and a $6,000 senior deduction. The estate exclusion is permanently $15,000,000. Source: IRS Rev. Proc. 2025-32 and OBBBA (Pub. L. 119-21), retrieved 2026-08-11.
Permanent changes (TCJA made permanent)
Single / married-joint — now permanent.
Made permanent for pass-through businesses.
Made permanent.
Permanent, inflation-indexed from 2027.
Temporary 2025–2028 deductions
| Provision | Limit | Phase-out (MAGI) |
|---|---|---|
| No tax on tips | $25,000 | $150k single / $300k joint |
| No tax on overtime | $12,500 / $25,000 | $150k single / $300k joint |
| Senior deduction (65+) | $6,000 / $12,000 | $175k / $250k joint |
| Non-itemizer charitable | $1,000 / $2,000 | Permanent |
The tips and overtime deductions are above-the-line and apply for tax years 2025–2028. The non-itemizer charitable deduction is permanent.
SALT deduction cap
About +1% per year through 2029; reverts to $10,000 in 2030.
Cap phases down for high-income filers.
Sources & methodology
- IRS — Tax inflation adjustments for tax year 2026 (Rev. Proc. 2025-32) — Internal Revenue Service
- IRS Pub. 15 (Circular E), Employer’s Tax Guide 2026 — Social Security wage base $184,500 — Internal Revenue Service
- IRS Pub. 15-T (2026), Federal Income Tax Withholding Methods — Internal Revenue Service
- IRS Form 1041-ES (2026) — capital gains rate thresholds — Internal Revenue Service
- OBBBA (One Big Beautiful Bill Act), Pub. L. 119-21 — SALT, estate, QBI, QSBS, senior deduction — Internal Revenue Service
Related tools & guides
OBBBA 2026 FAQ
What did the One Big Beautiful Bill Act (OBBBA) make permanent for 2026?
OBBBA (Pub. L. 119-21, enacted July 2025) made the TCJA individual income tax brackets and the standard deduction permanent, along with the 20% QBI deduction, the 21% corporate rate, and the $15M/$30M estate exclusion. These had been scheduled to expire after 2025.
What is the SALT deduction cap in 2026 under OBBBA?
The state and local tax (SALT) deduction cap rises to $40,400 for married couples filing jointly in 2026 ($20,200 for married-separate). It increases about 1% per year through 2029, then reverts to $10,000 in 2030 and phases down for MAGI above $500,000.
How does "no tax on tips" work in 2026?
For tax years 2025–2028, a new above-the-line deduction lets workers exclude qualified tips up to $25,000. It begins to phase out at $150,000 of MAGI for single filers and $300,000 for married-joint filers. It is a deduction, not an exclusion from wage income for payroll-tax purposes.
How does "no tax on overtime" work in 2026?
For tax years 2025–2028, qualified overtime premium pay is deductible up to $12,500 for single filers and $25,000 for married couples filing jointly, with the same MAGI phase-out as the tips deduction.
Is there a senior deduction in 2026?
Yes. Taxpayers age 65+ get an additional above-the-line deduction of $6,000 ($12,000 married-joint) for tax years 2025–2028, phasing out above $175,000 MAGI ($250,000 joint).
Did the estate tax exemption change permanently?
Yes. OBBBA made the federal estate and gift exclusion permanently $15,000,000 per person ($30,000,000 per couple), inflation-indexed from 2027, removing the scheduled 2026 sunset.
Not tax, legal, or financial advice
FiscTalk provides general educational information from public sources. Tax outcomes depend on your full facts, filing history, and jurisdiction-specific rules that change yearly. Before filing or making decisions, consult a licensed CPA, EA, or attorney. FiscTalk is not a fiduciary and is not affiliated with the IRS or any state agency.