When will key aspects of Trump's ‘big, beautiful bill' take effect?

Yahoo

13 hours ago

President Trump signed his sweeping tax cut and spending package known as the 'big, beautiful bill' into law during a Fourth of July celebration on Friday.
The measure boosts defense and border wall funding and makes Trump's 2017 tax cuts permanent, offsetting some of those costs with deep cuts to Medicaid, food assistance programs, student loans and clean energy programs.
Some of the law's key pieces will take effect later this year, while others will not be implemented until well after midterm elections.
Here are when the biggest parts of the new law will take effect:
Among the bill's most contentious parts are its reforms to Medicaid, the joint federal and state program that provides health insurance coverage to low-income Americans.
A number of Republicans were worried about the cuts to Medicaid, with some saying the party risked political backlash by adopting the cuts since many GOP voters could be affected by them.
The question may be how many of those voters feel the effects before November 2026.
Roughly 16 million people could lose their health insurance coverage by 2034 due to cuts to Medicaid and changes to the Affordable Care Act marketplace, according to the Congressional Budget Office.
Americans could also lose their coverage due to new work requirements for the program. Under the law, adults between the ages of 19 and 64 will need to work at least 80 hours a month to qualify for Medicaid coverage unless they qualify for certain exemptions.
Some adults will be exempt from the new work requirements if they have dependent children or have certain medical conditions.
Medicaid's funding changes under the law are not scheduled to take effect until 2028, well past the upcoming 2026 midterm elections. Some work requirements could come earlier, however. They are to begin no later than Dec. 31, 2026.
The law will change the country's largest food assistance program, the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. Like Medicaid, SNAP will also undergo funding and work requirement changes.
In the past, the federal government has funded the program while states have taken on the cost of managing it. Under the bill's conditions, states will be required to partially fund SNAP if they have a payment error rate of 6 percent or higher beginning in 2028 — two years after the midterms.
However, the law also allows states with payment error rates of 13.34 or higher to delay paying for the program for two additional years.
Previously, most adults had to work until age 54 to qualify for SNAP unless they were a parent with dependents. Now, the working age to stay in the program has been raised to 64, and only parents with children younger than 14 are exempt from the requirement, according to the law.
The law does not specifically state when the updated work requirements will begin to take effect, but a spokesperson for the Senate Republicans said there is no 'delayed implementation in the law.' A spokesperson for the U.S. Department of Agriculture has yet to respond to questions from The Hill about the new enforcement requirement.
The law paves the way for numerous tax changes, with the most significant being to the cuts Trump enacted during his first term in 2017. Those expiring tax cuts are permanent, effective immediately.
Under the law, Americans living in high-tax states such as New York and California will receive larger income tax deductions for state and local taxes, otherwise known as SALT, beginning this year and lasting until 2028.
Republicans will be selling these tax cuts aggressively, since people who qualify for the cuts will feel them well ahead of the midterm elections.
Some tax provisions will impact working-class voters.
Starting this year, tip amounts of less than $25,000 will be tax-deductible through 2028. There is a cap for the deduction of a $150,000 income or $300,000 for people filing jointly, according to the law.
The law also changes when overtime pay will be tax-deductible. Starting this year, up to $12,500 of extra overtime pay is tax-deductible until 2028. Again, there is an income limit of $150,000 a year for a single person or $300,000 for those filing jointly.
Changes to the child tax credit will also take effect this year. Now, the child tax credit is $2,200 for every qualifying child. The amount will also be adjusted for inflation starting next year.
Changes to the senior deduction also take effect this year. Beginning this year until 2028, Americans older than 65 can deduct an additional $6,000 on their tax returns.
The law eliminates numerous tax incentives from the 2022 Inflation Reduction Act for clean energy and energy efficiency programs. Under the law, $7,500 tax credits for electric vehicles will be eliminated starting Sept. 30 of this year — well ahead of the midterms.
It also eliminates a $3,200 tax credit for Americans making energy-improvement changes to their homes beginning in 2026 and ends tax credits for Americans who make investments in clean energy sources for their homes, including solar panels, fuel cells or battery storage technology starting next year.
The law also ends the Greenhouse Gas Reduction Fund, which helps finance local emissions-reduction projects, beginning this year. Although it appears that current contracts under the program will remain in place.
The bill will make some changes to how Americans finance higher education.
Grad PLUS loans as well as repayment options like the SAVE Plan and Income-Contingent Repayment and Pay as You Earn plans will be scrapped and replaced with a Repayment Assistance Plan or a standard repayment plan.
Grad PLUS loans will be replaced with new borrowing caps of $100,000 for many grad students and $200,000 for professional students, such as those enrolled in medical schools or law schools.
For undergraduate students, Stafford loans will remain capped, and Parent PLUS loans now have a reduced lifetime cap of $65,000. All of the loan changes are set to take effect in July of 2026.
The law also changes tax rates for colleges based on the size of their endowments. In 2026, schools with higher endowments per student will receive higher tax rates on their endowment. Schools with endowments between $500,000 and $750,000 will have a tax rate of 1.4 percent.
Those with endowments of $750,000 to $2 million now have a tax rate of 4 percent, and those with more than $2 million will be taxed at 8 percent.
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.