Exploring Expiring Provisions of Trump's Tax Cut Law in 2026
Provisions Set to Expire in 2026
Trump's Tax Cuts and Jobs Act (TCJA) established substantial reductions, most notably for corporate taxes, while implementing temporary cuts for individuals to mitigate its deficit impact, now exceeding $36 trillion. As Republicans regain control, they may push for a renewal or extension of certain provisions set to expire.
Individual Tax Rates on the Rise
Several individual tax rates are projected to ascend in 2026, marking a major shift in tax obligations.
- Income between $11,000 and $45,000: Rate increases from 12% to 15%.
- Income up to $95,000: Increases from 22% to 25%.
- Income up to $182,000: Rates rise from 24% to 28%.
- Income up to $231,000: Bumps from 32% to 33%.
- Income exceeding $580,000: Climb from 37% to 39.6%.
Most Americans fit into the lower brackets, raising concerns over the potential impact on taxpayers nationwide.
SALT Deduction Cap and Taxpayer Impact
The elimination of the SALT deduction cap is another pivotal aspect. This cap sparked controversy among Republicans, especially in Democratic states. Its removal could significantly benefit taxpayers earning various incomes.
Cost Implications: Without extension, lifting the SALT cap might lead to an additional $1.2 trillion expense.
Changes to Standard Deductions
Standard deductions would revert after 2025 unless addressed, shrinking from current elevated figures back to 2018 levels.
- Standard deductions to decline: For singles from $14,600 to $6,500.
- Heads of Household: From $21,900 to $9,550.
- Married Filers: Down from $29,200 to $13,000.
Child Tax Credit Reduction
Proposed changes to the Child Tax Credit (CTC) could decrease the amount per child significantly, impacting families across the nation.
Estate and Gift Taxes Increase
The estate and gift tax exclusions will also reduce substantially without extension, influencing wealth transfer strategies.
Past Expiring Tax Breaks
Various tax breaks from the TCJA have expired or will expire soon. The inability to renew these breaks indicates a shifting fiscal landscape that could diminish growth opportunities for many sectors.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.