Many of the bill’s tax deductions will start in 2025, and some of them will be permanent. That includes a permanent increase in the child tax credit to $2,200 and an increase in the standard deduction by $750.
Other new tax cuts, especially those core to Trump’s campaign promises, are set to expire in a couple of years. A new $6,000 deduction for Americans over 65 will last only through 2028. A $25,000 deduction designed to eliminate taxes on tips will also only last for three years. The same goes for another $12,500 deduction meant to curb taxes on overtime.
The amount that households can deduct in state and local taxes on their federal returns, known as the SALT cap, will also increase to $40,000. Previously capped at $10,000, SALT deductions were a major sticking point among House Republicans during the first rounds of negotiations on the bill in May.
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