Summary: As of the publication date, legislation on what is being called the “One Big Beautiful Bill” has passed the House and will likely face substantial hurdles in the Senate around Medicaid funding, food assistance, energy credits, the SALT cap, and spending cuts. The uncertainty surrounding the bill’s passage means businesses and individuals cannot plan for specific tax provisions, which can create added complexity to forecast potential financial impacts.

After weeks of discord, the House of Representatives passed a measure to extend the provisions of the 2017 Tax Cuts and Jobs Act (TCJA), provide other targeted tax breaks such as temporarily pausing taxes on tips and overtime, and increase defense and border security spending. Titled the “One Big Beautiful Bill,” this new legislation will also reduce Medicaid spending as well as spending on food assistance programs.

What’s next for the One Big Beautiful Bill?

However, passing the House was just the first step in the bill’s difficult journey to law. It now moves on to the Senate floor where it will face Senators who have already voiced their objections to the bill’s provisions on energy credits, Medicaid, food assistance, and overall spending cuts. If the Senate changes any provisions of the House bill, the House must either accept the Senate version, or the House and Senate bodies will need to form a conference committee to reconcile the two bills.

Key Provisions as the Current Tax Bill Stands

Individual Income Tax Provisions

While the House leadership has set an enactment date of July 4th to celebrate passage of the legislation, it is possible that the bill may not be passed by that date in its current form. In fact, if recent history is any example, it is possible that the bill may not be enacted until much closer to the end of the federal fiscal year, which is September 30. Since the bill remains in a fluid situation, this article outlines some of the bill’s key provisions, along with its projected financial impact, possible impediments to passage, and potential amendments as of May 21, 2025. It is still premature to begin tax planning in regard to specific provisions within the bill, as many are subject to change prior to the final passage of the legislation.

Projected Financial Impact of the One Big Beautiful Bill

While the Congressional Budget Office (CBO) has not had time to provide an analysis of the bill as it stands now, it is estimated that the deficit will increase by an additional $4 trillion over the 10-year period beginning in 2026 as a result of the measures in this bill. If the temporary provisions in the measure are extended beyond the expiration dates provided in the bill, the projected deficit increase rises to over $4.5 trillion. Federal spending, with subsidies, is expected to decrease by $1 trillion. Furthermore, household resources for the lowest tax brackets will decrease by about 2% in 2027 and 4% in 2033, whereas those taxpayers in the highest tax brackets will see an increase of 4% in 2027 and 2% in 2033.

Energy and Environment Provisions

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