Chairman’s amendment would extend most 2017 tax changes and add new provisions, JCT staff says

Tom Barthold, chief of staff for the Joint Committee on Taxation, and committee counsel gave the committee a technical overview of the chairman’s amendment in the nature of a substitute and highlighted multiple substantive changes relative to current law and the text distributed on Friday.

Barthold said the amendment “would extend and make permanent almost all of the provisions of public law 01/1597 that were otherwise scheduled to expire at the end of this year,” while also making modifications to indexing and several benefit levels. His walk‑through identified the following key provisions:

- Rate schedule and standard deduction: The rate schedule from the 2017 law would be extended and made permanent; the standard deduction is extended and, for 2025–2028, increased by an extra inflation adjustment worth $1,000 for single filers, $1,500 for head of household, and $2,000 for joint filers.

- Child tax credit: The credit is extended permanently in the substitute but is set at $2,500 for 2025–2028 with changes to eligibility tied to Social Security numbers and other modifiers described to the committee.

- Small business (section 199A): The pass‑through deduction is extended and increased from 20% to 23% (Barthold noted an error in the distributed description that incorrectly referenced 22%).

- Estate and gift tax: The estate tax exemption is set at $15,000,000 effective 2026, indexed to inflation and made permanent.

- SALT limitation: The existing $10,000 cap would be increased to $30,000 with a phase‑out for taxpayers with modified adjusted gross income above $400,000; certain state substitute payment arrangements would be limited.

- Tip and overtime rules: The substitute would enact an exclusion for tips reported on W‑2 wage statements (available to itemizers and non‑itemizers) and a qualified overtime deduction for premium pay (both initially effective for years 2025–2028 as described by Barthold). Barthold also noted reporting requirements attached to those provisions.

- Business provisions: The substitute includes 100% bonus depreciation for certain property placed in service 1/19/2025 through 2029, full expensing for specified domestic research expenditures under Sec. 174, adjusted treatment of business interest limitations, expanded Section 179 expensing to $2.5 million, and permissive manufacturing depreciation rules for certain periods.

- Trade and de minimis: Josh Snead, chief trade counsel, described a change to section 321 of the Tariff Act of 1930 that would add a penalty structure (first violation up to $5,000; subsequent up to $10,000) and repeal the $800 de minimis threshold for commercial shipments effective July 1, 2027; he said the bona fide gift and personal effects de minimis rules would remain unchanged.

- Medicare/eligibility language: Committee counsel described provisions that would amend the Social Security Act to allow certain facilities that closed in a prior period to reopen under rural emergency hospital designation, and language restricting Medicare eligibility to specified categories of lawful presence as described in the substitute.

- Debt limit language: Committee counsel also confirmed the substitute includes a reconciliation instruction provision to increase the statutorily imposed general limitation on public debt by $4,000,000,000,000.

Barthold and other technical witnesses repeatedly cautioned that the JCX materials distributed to members contained errata (he pointed to an error on page 22 regarding the 199A percentage) and that members should rely on official JCX documents for scoring and distribution tables.