Today the Senate is debating a revised One Big, Beautiful Bill Act (H.R. 1) that contains significant changes from some of the provisions contained in the draft bill released Friday. The changes that will have the most impact on our clients include:
- An increase in the SALT limitation of up to $40,000 for the 2025 through 2029 tax years (adjusted annually for inflation). The proposals that would have limited the deduction for passthrough entity owners and other SALT limitation workaround strategies have been removed from the bill;
- Retention of the current treatment of excess business loss carryovers. This means the carryovers would continue to be treated as a net operating loss;
- An acceleration of the repeal of various energy credits as follows:
- The New Clean Vehicle Credit, the Previously-Owned Vehicle Credit, and the Qualified Commercial Clean Vehicle Credit would all be repealed for vehicles acquired after September 30, 2025;
- The Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit would be repealed for property placed in service after 2025; and
- The Clean Electricity Investment Credit and the Clean Electricity Production Credits would be repealed for solar and wind energy technology facilities placed in service after 2027. In addition, restrictions on supply sourcing for foreign countries of concern may make many of these investments ineligible once OBBBA is enacted.
The bill must be passed by the Senate and then sent back to the House for approval. It is unclear what, if any, additional changes will be made by the House. If changes are made by the House, they will have to be sent back to the Senate once again for approval.
We will send additional updates as the bill moves through this process.
The latest version of the bill, released on Friday, June 27, 2025, is available at:
www.caltax.com/files/2025/taxbilldraft3.pdf
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