Every OBBBA Tax Change at a Glance

OBBBA touched more than a dozen individual provisions. The table below is the full map: what changed, how much it’s worth, who qualifies, how long it lasts, and where to read the in-depth guide. The most important distinction to keep in mind is permanent versus temporary — the four headline deductions and the SALT increase expire, while the standard deduction, Child Tax Credit, estate exemption, and QBI deduction are now permanent.

Quick Answers to the Top Questions

What are the new deductions?

There are four brand-new deductions for tips, overtime, car loan interest, and seniors, all claimed on the new Schedule 1-A. OBBBA also enhanced the SALT, charitable, and PMI deductions. The four headline deductions reduce taxable income whether or not you itemize.

Who qualifies?

Most working and retired taxpayers qualify for at least one new break, but each has its own income phase-out. Tips and overtime start phasing out at $150,000 (single) / $300,000 (joint); the car loan and senior deductions phase out at lower incomes. Married taxpayers generally must file jointly to claim them.

How do I claim them?

The four new deductions go on Schedule 1-A, which attaches to Form 1040. You do not have to itemize. Your W-2 (and, for some workers, Form 1099) will report the qualified amounts. See the how-to-claim section for step-by-step details.

Did the standard deduction change?

Yes. OBBBA made the larger standard deduction permanent and indexed it upward. For 2026 it is $32,200 (married filing jointly), $16,100 (single or married filing separately), and $24,150 (head of household).

Are these permanent or temporary?

Mixed. The four new deductions are temporary (2025–2028), and the SALT increase runs through 2029. The bigger standard deduction, the $2,200 Child Tax Credit, the $15 million estate exemption, the 20% QBI deduction, and the non-itemizer charitable deduction are permanent.

The 4 New Schedule 1-A Deductions

The “big four” are the heart of OBBBA for most households. They are claimed on a new IRS form, Schedule 1-A (Additional Deductions), which the IRS released for the 2026 filing season and which first applies to 2025 returns. The crucial feature: you can take all four whether you itemize or claim the standard deduction. One nuance worth knowing — these are claimed below the line, so they cut your taxable income but do not lower your adjusted gross income (AGI), which still governs other income-based benefits.

No tax on tips

Eligible workers can deduct up to $25,000 of qualified tips, regardless of filing status, with the benefit phasing out above $150,000 (single) or $300,000 (joint) MAGI. Tips must be reported, and tips earned in certain specified service businesses don’t qualify. Read the full guide to claiming no tax on tips.

No tax on overtime

This deduction covers only the FLSA-required premium portion of overtime pay — the extra “half” in time-and-a-half, not your full overtime wages. The cap is $12,500 (single) or $25,000 (joint), with the same $150,000 / $300,000 phase-out as tips. See how no tax on tips and overtime works.

No tax on car loan interest

You can deduct up to $10,000 of interest on a loan for a new, personal-use vehicle with final assembly in the United States, taken out after December 31, 2024. Note the lower phase-out here: it begins at $100,000 (single) / $200,000 (joint) — not the $150,000 / $300,000 used for tips and overtime — and disappears entirely by $150,000 / $250,000. Used cars, leases, and refinanced pre-2025 loans don’t qualify. Read the car loan interest deduction guide.

Enhanced senior deduction

Taxpayers 65 and older can deduct an extra $6,000 each ($12,000 if both spouses qualify), on top of the existing age-65 standard deduction add-on. It phases out starting at $75,000 (single) / $150,000 (joint) MAGI. This is a deduction, not a repeal of tax on Social Security benefits. Read the full $6,000 senior deduction guide.

The Bigger SALT Deduction ($40,000 Cap)

For years, the deduction for state and local taxes (SALT) was capped at $10,000. OBBBA quadrupled it to $40,000 ($20,000 for married filing separately) for tax years 2025 through 2029, with the cap and thresholds rising 1% a year. The catch is a phase-down for high earners: the cap is reduced by 30% of the amount your MAGI exceeds $500,000 ($250,000 if filing separately), though it never drops below $10,000 — so by roughly $600,000 of MAGI you’re back to the old $10,000 limit. In 2030, the cap reverts to $10,000 for everyone.

Because SALT is only available to itemizers, the bigger cap is a strong reason for homeowners in high-tax states to re-run the standard-versus-itemize math. A household that was just under the old $10,000 cap may now clear the standard deduction once $40,000 of state income and property taxes are back in play. (A dedicated SALT guide is on the way.)

Standard Deduction & Tax Brackets for 2026

OBBBA made the TCJA-era tax rates permanent and locked in a larger standard deduction, then applied the normal inflation adjustment for 2026. The familiar seven brackets (10% to 37%) remain. One change aimed at the top: starting in 2026, the value of itemized deductions is capped at 35% for filers in the 37% bracket, so each dollar deducted is worth slightly less for the highest earners.

The bigger SALT cap and the permanent standard deduction interact directly: with up to $40,000 of SALT plus mortgage interest and charitable gifts, more middle- and upper-middle-income households will find that itemizing beats the standard deduction for the first time in years. Run both numbers before you file.

Permanent Changes: Child Tax Credit, Estate Tax, QBI & AMT

While the headline deductions sunset in 2028, several of OBBBA’s most consequential provisions are permanent.

The Child Tax Credit was increased to $2,200 per qualifying child and made permanent, with phase-outs holding at $200,000 (single) / $400,000 (joint) and inflation indexing going forward. Read the Child Tax Credit 2026 guide.

The estate, gift, and generation-skipping transfer (GST) exemption rose to $15 million per individual ($30 million per couple), effective January 1, 2026, and indexed for inflation from 2027 — eliminating the scheduled drop to roughly $7 million. The 40% top estate-tax rate is unchanged.

The 20% qualified business income (QBI) deduction for pass-through and self-employed owners is now permanent, as are the TCJA individual rate cuts and the higher alternative minimum tax (AMT) exemption and phase-out thresholds, which prevents millions of households from being pulled into the AMT in 2026.

New Charitable Deduction for Non-Itemizers

Beginning in 2026, taxpayers who take the standard deduction can deduct cash gifts to public charities — up to $1,000 (single) or $2,000 (joint) — without itemizing. This permanent above-the-line deduction does not apply to gifts to donor-advised funds or private foundations, and it isn’t reduced by the new floor described below.

For those who do itemize, OBBBA added a 0.5% of AGI floor on charitable gifts starting in 2026 — the first 0.5% of your AGI in donations is no longer deductible — while making the 60%-of-AGI limit on cash gifts permanent. Top-bracket donors also feel the 35% itemized-deduction cap noted above.

Other Key Changes: 1099-K, Gambling Losses, Trump Accounts & PMI

The 1099-K reporting threshold was restored to the old dual test — more than $20,000 and more than 200 transactions — so most casual online sellers will receive far fewer forms (though all income remains taxable whether or not a form arrives). See the 1099-K threshold 2026 guide.

Gambling losses are tougher starting in 2026: itemizers can deduct only 90% of losses, up to winnings. A bettor who wins and loses $10,000 in the same year can deduct just $9,000, creating taxable “phantom” income even when they broke even. (A dedicated guide is planned.)

Trump Accounts are a new tax-deferred account for children under 18, with a one-time $1,000 federal seed for U.S.-citizen newborns born 2025–2028 (claimed via Form 4547). Families can contribute up to $5,000 a year. Read the Trump Accounts 2026 guide.

PMI is deductible again. From 2026, mortgage insurance premiums on acquisition debt can be treated as deductible mortgage interest for itemizers. And if you’re weighing whether a discharged balance is taxable, see whether student loan forgiveness is taxable in 2026.

Who Benefits Most (and Who Doesn’t)

OBBBA is broadly favorable, but the gains are uneven. The clearest winners are tipped and overtime workers, who can shelter a large slice of pay; homeowners in high-tax states, who regain a meaningful SALT deduction; seniors 65 and older; buyers of new U.S.-assembled vehicles; and families, through the permanent $2,200 Child Tax Credit and the bigger standard deduction.

The picture is more mixed for high earners, who run into income phase-outs on nearly every new deduction, the SALT phase-down above $500,000, and the new 35% cap on itemized-deduction value. Gamblers lose ground under the 90% loss limit, and very high-income filers may see little from the headline breaks at all. As always, the actual effect depends on your income, filing status, and which provisions you can stack. For a wider hunt, see our checklist of tax deductions you’re probably missing and how an HSA can build tax-free wealth.

How to Claim the New Deductions on Your 2026 Return

Claiming OBBBA’s new breaks is more about paperwork than strategy, but a few steps matter:

1. Use Schedule 1-A for the big four. Tips, overtime, car loan interest, and the senior deduction all flow through Schedule 1-A to Form 1040 — no itemizing required. You complete only the parts that apply to you, after the form first figures your MAGI.
2. Check your information returns. For 2026, employers report qualified tips and overtime in dedicated W-2 boxes (the IRS added new codes for the form), and lenders report deductible car loan interest. For the 2025 transition year, the IRS allowed taxpayers to use their own records where employer reporting wasn’t yet available.
3. Re-run standard versus itemized. With the $40,000 SALT cap, itemizing may now win even if it hasn’t for years — and the four new deductions don’t change that decision, since you can take them either way.
4. Mind the SSN and joint-filing rules. Valid Social Security numbers are required, and married taxpayers generally must file jointly to claim the new deductions.
5. Watch your MAGI against each phase-out. The thresholds differ by deduction — especially the lower $100,000 / $200,000 range for car loan interest — so a single income figure can qualify you for some breaks and not others.

Planning your cash flow around the refund? See the 2026 tax refund schedule.

Frequently Asked Questions

What new tax deductions are available in 2026 under OBBBA?

Four new deductions for tips (up to $25,000), overtime (up to $12,500 single / $25,000 joint), car loan interest (up to $10,000), and seniors (up to $6,000 per person), all on Schedule 1-A — plus enhanced SALT, charitable, and PMI deductions.

How does the One Big Beautiful Bill affect individual taxes for 2026?

It lowers taxable income for most households through new deductions, a larger permanent standard deduction, a $40,000 SALT cap, and a $2,200 Child Tax Credit, while adding income phase-outs and a 35% itemized-deduction cap for top earners.

What changed in the Trump tax law for 2026?

OBBBA created the four Schedule 1-A deductions, quadrupled the SALT cap, made the standard deduction and Child Tax Credit permanent, set the estate exemption at $15 million, restored the $20,000/200 1099-K threshold, and limited gambling-loss deductions to 90%.

How do I claim the new OBBBA deductions on my return?

Complete the new Schedule 1-A and attach it to Form 1040. You don’t need to itemize. Use the qualified amounts reported on your W-2 or 1099, and check each deduction’s income phase-out against your MAGI.

Did the standard deduction change for 2026?

Yes. It’s now $32,200 for married filing jointly, $16,100 for single and married filing separately, and $24,150 for head of household — higher amounts that OBBBA made permanent.

Are the new deductions permanent or temporary?

The four headline deductions are temporary (2025–2028), and the SALT increase runs through 2029. The standard deduction, Child Tax Credit, estate exemption, QBI deduction, and non-itemizer charitable deduction are permanent.

Who qualifies for the new SALT cap?

Any taxpayer who itemizes can use the $40,000 cap, but it phases down by 30% of MAGI above $500,000 ($250,000 if filing separately) and never falls below $10,000. By about $600,000 of MAGI, you’re effectively back to the $10,000 limit.

Do I have to itemize to claim tips, overtime, car loan, or senior deductions?

No. All four are claimed on Schedule 1-A and are available whether you take the standard deduction or itemize. They reduce taxable income but not your AGI.

How much did the SALT deduction increase?

From $10,000 to $40,000 ($20,000 for married filing separately) for 2025 through 2029, rising 1% a year, before reverting to $10,000 in 2030.

Does OBBBA raise or lower my refund?

For most households it lowers tax and raises refunds — early 2026 IRS data showed the average refund up about 10.6% year over year (roughly $3,700 in late-February figures). Your result depends on income, filing status, and which deductions you qualify for.