Megabill clears final hurdles to become law

Less than 48 hours after narrow approval in the U.S. Senate, legislation nicknamed the “One Big Beautiful Bill” cleared the House of Representatives and is expected to be signed into law within days.

The bill overcame staunch opposition from Democrats and many Republicans to pass in both chambers, and the final version of the bill features a variety of late concessions added to win votes among skeptical legislators. The bill passed 51-50 in the Senate after Vice President J.D. Vance supplied the tie-breaking vote; it passed in the House 218-214.

President Donald Trump said that he will sign the legislation into law immediately.

The bill prominently includes new and enhanced tax breaks that opponents say will add trillions of dollars to the federal deficit. Included in the bill is a temporary reprieve ending taxes on tips through 2030, as well as a $6,000 Social Security tax deduction for those age 65 and older through 2028 for those with modified adjusted gross income of under $75,000 ($150,000 for married joint filers).

In addition, the bill introduces other significant changes, including in the state and local tax (SALT) deduction cap and the Child Tax Credit (CTC). It also features defense spending increases and enhanced immigration enforcement measures. To offset a portion of the bill’s cost of $4 trillion, it added cuts to safety-net programs such as Medicaid and rollbacks of solar energy tax credits.

SALT deduction cap

A major sticking point in both branches of Congress was the SALT deduction cap. It’s currently set at $10,000 by the Tax Cuts and Jobs Act.

The new bill will increase the cap to $40,000 in 2025 for those making less than $500,000, with an annual 1% increase through 2029. In 2030, the cap will revert to $10,000. It also calls for phasing out the deduction for individuals who earn more than $500,000 in 2025 and then annually increasing the income amount by 1% through 2029.

Child Tax Credit (CTC)

Under current law, the $2,000 per child CTC was set to drop to $1,000 after 2025. The new legislation will make the CTC permanent and increase it to $2,200, subject to annual inflation increases. It will require Social Security numbers for both the parent claiming the credit and the child.