July 4 marks the one year anniversary of the Working Families Tax Cut, also known as the One Big Beautiful Bill Act – a landmark NAHB-backed law that permanently extended the 2017 tax cuts and provided significant tax relief to working families and small businesses.
The law was a major tax package from the 119th Congress, supported by Republicans, to prevent large tax increases on middle-class families.
“The tax cuts for working families have spurred economic growth and given NAHB members the tax certainty they need to invest in their businesses,” said NAHB Chairman Bill Owens. “Over the past year, this law has helped Americans keep more of their hard-earned money, expanded access to homeownership, and led to a historic increase in resources for building affordable rental housing.”
Here are some key residential and business provisions in the Working Families Tax Relief Act that apply to tax year 2025 and beyond:
Table of Contents
For companies:
- Full billing (100% bonus depreciation) restored for business investments made after January 19, 2025.
- Increased § 179 Limits and phase-outs of small business spending apply throughout 2025.
- Section 460(e) The concluded contract rules were extended to include condominiums in addition to single-family homes. This is an important tax accounting rule that ensures that home builders are not taxed on the down payments made by a buyer when building a single-family home. This bill extends the same tax treatment to deposits made by condominium buyers during construction and applies to contracts entered into after July 4, 2025.
For individuals:
- Increased standard deduction: For 2025, the deduction increases to $31,500 for married couples filing jointly and $15,750 for single filers. These amounts are adjusted annually for inflation
- Extended standard deduction for seniors: Effective 2025 through 2028, individuals age 65 and older can claim an additional deduction of $6,000 in addition to the standard deduction. This deduction does not apply to taxpayers with modified adjusted gross income over $75,000 ($150,000 for co-filers).
- Increased salt withdrawal: The state and local tax deduction (SALT) cap will temporarily increase from $10,000 to $40,000, effective from 2025 to 2029, with a 1% inflation adjustment after 2025. The increased cap will phase out for households with income above $500,000, but the cap will not fall below $10,000.
- No tax on tips and overtime: Up to $25,000 in tips and $12,500 in overtime hours ($25,000 for married couples filing jointly) are deductible for individuals with income under $150,000 ($300,000 for married couples filing jointly).
Additional tax changes came into effect for 2026, including:
- An increase in inheritance tax exemption,
- An increase in the 1099 reporting threshold and
- The ability to deduct private mortgage insurance premiums.
For more information about important tax changes in the law, visit irs.gov.
NAHB provides this information for general information only. This information does not constitute, and should not be construed as, legal advice, tax advice, accounting, investment advice or professional advice of any kind. The information provided herein should not be used as a substitute for advice from professional tax, accounting, legal or other competent advisors. Before making any decision or taking any action based on this information, you should consult a qualified professional advisor to whom you have provided all facts relevant to your particular situation or question.
https://www.nahb.org/blog/2026/07/working-families-tax-cuts-anniversary
