TCJA Permanency Act

Summary#

This bill, called the TCJA Permanency Act, would change many parts of the Internal Revenue Code to make several Tax Cuts and Jobs Act (TCJA) provisions permanent and to change other tax rules for individuals, families, estates, and some small businesses. It replaces the income tax rate tables for different filing statuses; adjusts how capital gains rate brackets are set; changes inflation-adjustment rules; and makes many TCJA timing provisions permanent. The bill also changes or clarifies many deductions, credits, and limits across the tax code.

Major specific changes in the bill text include:

  • Replacing the individual income tax rate tables for married filing jointly, heads of household, single filers, married filing separately, and estates and trusts with new bracket amounts and inflation rules.
  • Amending the capital gains bracket rules and defining dollar amounts for the maximum 15% capital gains rate.
  • Striking subsection (i) of section 199A (the qualified business income pass-through deduction) from the Code.
  • Changing rules on excess business losses for non-corporate taxpayers to disallow any such excess loss.
  • Increasing standard deduction dollar amounts in section 63(c) to the dollar figures shown in the bill and updating their inflation adjustments.
  • Setting the child tax credit at $2,000 per qualifying child and $500 for other qualifying dependents, specifying phaseouts based on modified adjusted gross income ($400,000 for joint returns and $200,000 for others), adding a taxpayer identification requirement, and changing the refundable portion rules.
  • Increasing the limit for cash charitable contributions to 60% of a taxpayer’s contribution base and allowing five-year carryovers for excess amounts under that rule.
  • Making permanent several provisions tied to ABLE accounts and 529 rollovers by removing expiration dates in current law.
  • Clarifying that some foreign-area income exclusion rules include the Sinai Peninsula of Egypt under specified conditions.
  • Reinstating a tax-free treatment for student loan discharges on account of death or total and permanent disability for discharges after December 31, 2024.
  • Expanding 529 qualified expenses to include a list of elementary and secondary costs and homeschool expenses.
  • Repealing the deduction for personal exemptions and moving dependent rules into a redesigned section; adjusting many cross-references across the tax code to match that change.
  • Limiting individual deductions for state and local taxes (SALT) to $10,000 ($5,000 for married filing separately).
  • Changing mortgage interest rules to limit deductible interest to acquisition indebtedness and setting dollar caps for acquisition indebtedness ($750,000 generally, with transitional treatment for indebtedness incurred before December 15, 2017).
  • Restoring the personal casualty loss deduction to apply to losses attributable to federally declared disasters and removing an earlier expiration date.
  • Denying miscellaneous itemized deductions (the 2-percent floor) for individuals beginning after enactment, and removing the overall Pease limitation on itemized deductions while adding certain thresholds for other calculations.
  • Ending the exclusion for qualified bicycle commuting reimbursements and limiting moving expense exclusions and deductions to members of the Armed Forces who move under military orders.
  • Increasing the estate and gift tax exemption to $10,000,000 for estates and gifts after enactment.
  • Making the increased exemption amounts under the alternative minimum tax (AMT) permanent and changing the phaseout thresholds and inflation adjustments.

Most changes in the bill take effect for taxable years beginning after the date of enactment or on dates stated in particular sections.

What it means for you#

  • If you are an individual taxpayer: the bill replaces the tax rate tables and changes several deduction and credit rules that could affect your taxable income and tax calculation. The standard deduction amounts in the tax code would be raised as shown in the bill. The child tax credit amounts, the rules for who qualifies, and the refundable portion would be changed as described. The personal exemption deduction would be removed from the code and dependent rules would be moved and adjusted.
  • If you itemize deductions: the bill denies miscellaneous itemized deductions (the old 2% category) and keeps or changes other deduction limits (for example, SALT deduction limited to $10,000 and mortgage interest limits for acquisition debt). The overall limitation (Pease) on itemized deductions would be repealed.
  • If you run a small business or have pass-through business income: the bill strikes a particular subsection of the pass-through qualified business income deduction (section 199A(i)) and disallows any excess business loss for non-corporate taxpayers. Those changes affect how business losses and the pass-through deduction operate in practice.
  • If you use education savings accounts: the bill makes permanent some expanded ABLE and 529 rollover rules and allows 529 funds to pay for many elementary and secondary expenses including homeschool costs and tutoring under certain conditions.
  • If you are an estate planner or making large gifts: the unified estate and gift tax exemption amount is raised to $10,000,000 for transfers after enactment.
  • If you have forgiven student loans because of death or disability after 2024: those discharges are treated as non-taxable under rules added in the bill.

Exact effects for any individual or household depend on that taxpayer’s income, filing status, deductions, and other facts. The bill text contains the specific legal changes to the tax code but does not include numerical budget projections or revenue estimates.

Expenses#

No publicly available information on projected budget effects, revenue changes, or cost estimates appears in the provided bill text or metadata.

Proponents' View#

No publicly available information on proponents’ explanations, statements, or floor remarks is included in the provided text and metadata.

Opponents' View#

No publicly available information on opponents’ explanations, statements, or floor remarks is included in the provided text and metadata.