One Big Beautiful Bill Act Changes on the 2026-27 EA Exam
The One Big Beautiful Bill Act (Public Law 119-21) was signed on 4 July 2025. Because the 2026-27 SEE tests law as amended through 31 Dec 2025, the act's changes that apply to 2025 are fair game, while changes that start in 2026 are not. Many prep products written for 2024 law have not caught up.
Individual changes for 2025 (Part 1)
| Item | 2025 rule |
|---|---|
| Standard deduction | $15,750 single and MFS, $31,500 joint and QSS, $23,625 head of household |
| SALT itemized deduction cap | $40,000 ($20,000 MFS), reduced by 30% of MAGI over $500,000 but not below $10,000 |
| Child tax credit | $2,200 per child, $1,700 refundable; taxpayer (or one spouse on a joint return) needs a valid SSN |
| New Schedule 1-A deductions | Qualified tips up to $25,000; qualified overtime up to $12,500 ($25,000 joint); car loan interest up to $10,000; seniors' deduction of $6,000 per person 65+ |
| Adoption credit | Up to $5,000 refundable |
| Clean energy credits | New clean vehicle credit ends for vehicles acquired after 30 Sep 2025; home energy credits end after 2025 |
Business changes for 2025 (Part 2)
| Item | 2025 rule |
|---|---|
| Section 179 | $2,500,000 limit, phased out above $4,000,000 |
| Bonus depreciation | 100% for qualified property acquired after 19 January 2025 (40% may be elected for that first year) |
| Section 163(j) | Adjusted taxable income again adds back depreciation and amortization |
| Domestic research costs | Deductible currently under new section 174A, or amortized over 60 months by election |
| Form 1099-K | Reported only above $20,000 and 200 transactions |
Changes that start in 2026 (not tested this window)
- The 90% limit on gambling losses.
- The charitable deduction for non-itemizers and the 0.5% floor for itemizers.
- The 1% floor on corporate charitable gifts.
- The $2,000 Form 1099-NEC/MISC threshold.
- The $15,000,000 basic exclusion amount for estate and gift tax.
Our questions are written for 2025 law and every explanation shows the tax year. Practice them in Part 1 and read the adjustments note.
Frequently asked questions
Is the One Big Beautiful Bill Act on the 2026 EA exam?
Its provisions that apply to tax year 2025 are within the law tested (as amended through 31 December 2025). Provisions starting in 2026 are not.
What is the 2025 SALT cap?
$40,000 ($20,000 married filing separately), reduced by 30% of MAGI over $500,000 but not below $10,000.
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