Tax Highlights of the One Big Beautiful Bill

Subtitle A — Relief for Working Families

SEC. 402. INCREASE IN STANDARD DEDUCTION.
(a) The Internal Revenue Code of 1986 is amended to increase the standard deduction by 20 percent for all filing statuses.
(b) This adjustment shall apply to taxable years beginning after January 1, 2026.
(c) Annual inflation adjustments shall apply thereafter.

SEC. 403. EXPANSION AND PERMANENT EXTENSION OF CHILD TAX CREDIT.
(a) The Child Tax Credit shall be permanently set at $3,600 per qualifying child under age 6 and $3,000 per child age 6 through 17.
(b) The credit shall be fully refundable and paid in monthly installments unless otherwise elected by the taxpayer.

SEC. 404. EXPANSION OF EARNED INCOME TAX CREDIT (EITC).
(a) Eligibility age for childless workers reduced to 18 years.
(b) Maximum credit amount increased by 30 percent for all eligible recipients.
(c) Income phase-out thresholds adjusted to reflect regional cost-of-living indexes.

Subtitle B — Small Business and Entrepreneurial Incentives

SEC. 411. NEW BUSINESS STARTUP INCENTIVE CREDIT.
(a) A one-time refundable tax credit of up to $50,000 shall be provided to eligible individuals or small entities that establish a new business in a federally designated underserved or economically distressed zone.
(b) Credit may be used for capital expenditures, employee hiring, or startup operating costs.

SEC. 412. REDUCTION OF SELF-EMPLOYMENT TAX BURDEN.
(a) The SECA tax rate for individuals with net earnings below $200,000 shall be reduced by 2 percentage points.
(b) Applies to taxable years beginning after January 1, 2026.

Subtitle C — Corporate Fairness and Minimum Tax

SEC. 421. ESTABLISHMENT OF CORPORATE MINIMUM TAX.
(a) A 15 percent minimum tax shall be imposed on U.S. corporations with average annual financial statement income exceeding $1 billion.
(b) This minimum tax shall apply regardless of deductions or credits that reduce taxable income to zero.

SEC. 422. OFFSHORE TAX REPATRIATION INCENTIVE.
(a) A one-time 10 percent tax shall be imposed on all offshore profits repatriated to the United States within two years of enactment.
(b) Funds must be reinvested in U.S. workforce development, R&D, infrastructure, or climate technology to qualify for the reduced rate.

Subtitle D — Wealth Equity and Investment Realignment

SEC. 431. MILLIONAIRE SURCHARGE.
(a) A 5 percent surtax shall apply to all individual taxpayers with adjusted gross income exceeding $10 million, and a 10 percent surtax for income exceeding $25 million.
(b) Surtax shall be in addition to existing income tax rates.

SEC. 432. CAPITAL GAINS TAX REFORM.
(a) Long-term capital gains shall be taxed at ordinary income tax rates for taxpayers earning over $1 million annually.
(b) This change applies to assets sold after December 31, 2025.

Subtitle E — Incentives for a Clean and Equitable Economy

SEC. 441. CLEAN MANUFACTURING TAX CREDIT.
(a) A 30 percent refundable tax credit shall be made available to businesses that invest in U.S.-based manufacturing facilities producing renewable energy equipment, battery storage systems, or carbon-neutral construction materials.

SEC. 442. RURAL JOB CREATION BONDS.

(a) Tax-exempt bonds shall be issued to finance business relocation, infrastructure, or workforce training in rural or economically depressed communities.
(b) Administered through a new Office for Rural Economic Development under the Department of Commerce.