Published 30 June 2025
1. Where things stand
At 2:14 a.m. July 01 the Senate wrapped up a marathon “vote‑a‑rama,” adopting the Finance Committee’s tax subtitle of the One Big Beautiful Bill Act of 2025 (BBB) and locking in a path to final passage before the July 4 recess. GOP leaders used a novel current‑policy baseline to keep the cost of the package under the Byrd‑rule cap, allowing them to proceed on a simple‑majority basis despite a projected real ten‑year deficit impact north of $3 trillion.
The Senate text diverges sharply from the version the House cleared on 22 May, so a conference—or a ping‑pong back to the House—still lies ahead. Below is a practical tour of the Senate bill’s tax provisions and the key contrasts business owners, advisors and individual taxpayers should watch.
2. Headlines for individual taxpayers
| Provision | Senate BBB | How it differs from House |
| Individual rate cuts | Makes the 2017 TCJA rate schedule permanent (top rate stays 37 %, brackets indexed) | House does the same. |
| Child Tax Credit | Bumps to $2,200 per child from 2025 with inflation indexing | House offers $2,500 for four years then reverts. |
| Bonus standard deduction for seniors | New $6,000 (single) / $12,000 (MFJ) deduction phased out above $75k / $150k AGI | House cap is $4,000 / $8,000. |
| No‑tax‑on‑tips & overtime | Above‑the‑line deductions capped at $25k (tips) and $12.5k (OT) per worker, sunset 12/31/28; phased out over $150k MAGI | House imposes no dollar caps. |
| SALT cap | Keeps the $10,000 limit but signals it is “open for negotiation” | House lifts cap to $40,000 with phase‑down after $500k MAGI. |
Why it matters: Permanent rate and 199A relief mean high‑earners avoid a 2026 “snap‑back” tax hike, but coastal taxpayers lose in the Senate draft because the SALT cap is left in place. Seniors and service‑industry workers get targeted sweeteners, although they are smaller than in the House bill.
3. Big changes for businesses
| Topic | Senate provision | Citation |
| 100 % bonus depreciation | Made permanent for property placed in service after 1/19/25 | |
| Section 179 expensing | Cap jumps to $2.5 M with phase‑out starting at $4 M | |
| R&D expensing | Immediate deduction for domestic R&D made permanent; retroactive election back to 2022 for small firms | |
| Business‑interest limitation (163(j)) | ATI once again computed on an EBITDA basis starting 2025 | |
| 199A pass‑through deduction | Permanently extended at 20 % (House bumps to 23 %) | |
| Excess business‑loss cap | Permanently retained, but disallowed losses carry forward under new rules | |
| Opportunity Zone 2.0 | Fresh designations begin 2027; rural bias; extra basis boost (3× for rural funds) |
Planning takeaway: The Senate text favors capital‑intensive and manufacturing businesses by locking in full expensing and an EBITDA‑based interest cap. Service pass‑throughs still get their 20 % deduction but will lobby hard against the SALT stalemate.
4. Energy & climate — roll‑backs with a softer landing
The Senate proposes a three‑year glide‑path for phasing out the Inflation Reduction Act’s wind and solar credits (100 % for projects started 2025 → 60 % in 2026 → 20 % in 2027; gone after 2027) and preserves transferability plus storage credits. Large wind farms on pre‑2025 federal leases keep a narrow safe harbour.
By contrast, the House version cuts credits off 60 days after enactment. Developers now face a choice: mobilise projects before 1 Jan 2026 or bank on conference negotiators extending the Senate’s longer runway.
5. International & “anti‑offshoring” rules
- GILTI / FDII reset: Section 250 deduction changes to 40 % for GILTI and 33.334 % for FDII; the “deemed tangible income return” disappears.
- Section 899 “unfair foreign tax” surtax: Senate delays start until 2027 and caps the rate bump at 15 % (House: 20 %).
- BEAT → BEMTA 14 %: Higher base‑erosion minimum‑tax rate, echoing OECD Pillar 2.
Cross‑border groups will welcome the later effective date and lower 899 surtax ceiling but must model harsher BEAT maths.
6. Five flash‑points for conference negotiators
- SALT cap – Senate $10k vs. House $40k; New York & California Republicans hold swing votes.
- CTC size – $2,200 (Senate) vs. $2,500 (House).
- 199A rate bump – 20 % vs. 23 %.
- Energy credit cliff – Immediate (House) vs. phased (Senate).
- Deficit score – Senate’s unconventional baseline masks >$3 T in cost; House uses traditional scoring.
Expect a messy July as leaders juggle these levers to secure 218 and 51 votes.
7. What should taxpayers do now?
| Audience | Action item |
| C‑suite & CFOs | Model both versions’ depreciation, 163(j) and energy‑credit timelines; prepare rapid‑deploy cap‑ex plans in case 100 % bonus and R&D expensing become law. |
| Pass‑through owners | Re‑evaluate entity‑level SALT work‑arounds; Senate draft sharply limits PTET benefits. |
| Renewable developers | Secure “begin‑construction” milestones before 12/31/25 to lock in full credits if Senate language prevails. |
| High‑income individuals in high‑tax states | Watch the SALT cap drama; final bill could swing liabilities by five figures. |
| Tip & overtime workers | Keep detailed records; the Senate deduction is capped and phases out. |
8. The road ahead
Majority Leader Thune hopes to cast the final Senate vote by Tuesday night, then send the bill straight to the House under a “take‑it‑or‑leave‑it” strategy. If the House balks, a fast conference committee is the fallback. Either way, GOP leadership and the White House still insist on a signature by July 4, 2025.
Stay tuned: we’ll update this post as soon as final legislative text emerges and the Joint Committee releases a fresh revenue estimate.
Disclaimer: This summary is for informational purposes only and should not be construed as tax or legal advice. Consult your advisors before taking action based on pending legislation.
