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Business Recorder
10-07-2025
- Politics
- Business Recorder
Employees transferred from T&T to PTC, and subsequently to PTCL: SC judgement
ISLAMABAD: The Supreme Court by majority of 2 to 1 held that the employees transferred from T&T to PTC, and subsequently to PTCL, retained not only their right to pensionary benefits but also the character of those benefits as dynamic and evolving rights. A three-judge, headed by Chief Justice Yahya Afridi and comprising Justice Aminuddin Khan and Justice Ayesha A Malik, on Thursday, announced the judgment regarding of pension of PTCL ex-employees. Multiple judgments of various High Courts were impugned before the Court, essentially on the same subject matter being the entitlement of the employees of the erstwhile Telegraph and Telephone (T&T) Department to receive the same pension and pensionary benefits accorded to civil servants, as notified by the federal government from time to time. Justice Yahya and Justice Amin disagreed with the judgment of Justice Ayesha. Justice Yahya judgment said while employees transferred from T&T to Pakistan Telecommunication Corporation (PTC), and subsequently to Pakistan Telecommunication Company Limited (PTCL) ceased to be civil servants, the statutory framework governing their transfer safeguarded their pensionary entitlements in full: not just as frozen benefits fixed at the time of transfer, but as living rights that were to progress in accordance with prevailing standards applicable to similarly situated public servants. The scheme under Section 9 of the Pakistan Telecommunication Corporation Act, 1991, and Section 36 of the Pakistan Telecommunication (Reorga-nization) Act, 1996 guarantees the continuation of these entitlements, and the administrative mechanism created under the PTCL Act, including the establishment of Pakistan Telecommunication Employees Trust (PTET) was intended to facilitate, not frustrate, this guarantee. PTCL and PTET are duty-bound to ensure that the full measure of these entitlements is met, and any interpretation that reduces these rights to static or discretionary payments is contrary to the legislative mandate. The majority judgment clarified that this conclusion and these dispositions, have not been reached in ignorance of the financial concerns raised by PTCL and PTET. The submissions regarding the financial burden and claims of fiscal unsustainability have been duly considered. However, financial difficulty does not absolve a statutory entity of its legal obligations. If the existing pension model is incapable of sustaining the financial burden, it is the model that must be recalibrated, not the statutory entitlements curtailed. That said, the practical challenges identified by PTCL and PTET are real, and it is recognised a rigid timeline for disbursement may not be financially viable. Accordingly, PTCL must acknowledge its continuing financial liability towards former civil servants and reflect this as a declared liability on its financial records in accordance with applicable accounting and corporate law principles. Thereafter, PTCL, through PTET, may determine a feasible disbursement schedule for revised pensionary payments, the needful be done within 90 days, and that the payment process remains transparent and equitable in addressing the rightful claims of the affected pensioners. The chief justice held; CPLA Nos. 412, 420–424, 461–463, and 506 of 2019; CPLA Nos. 424-K, 357-K, and 365-K of 2019; CPLA Nos. 6005, 6006, 6023–6030, 6087–6096, 6101–6106, 6268–6273, and 6364 of 2021, 6453-6456 of 2021; and CPLA Nos. 134–135 of 2022 are dismissed. The impugned judgments of the High Courts are upheld to the extent that they grant pensionary revisions to those transferred employees who were civil servants at the time of their transfer. Such employees are entitled to the continuation of pensionary benefits, including revisions notified by the federal government. The CPLA Nos 2107, 2140, 2141, 2143, 2144, 2145, 2146, and 2147 of 2022 are allowed. The impugned judgments are set aside. The petitioners, being civil servants at the time of transfer, are entitled to continued pensionary revisions as per federal government notifications. The CPLA Nos 2138, 2139, and 2142 of 2022 are allowed, subject to classification confirmation. The matters are remanded to the relevant High Court for factual determination of the service status of the petitioners at the time of transfer. If the petitioners are found to have been civil servants, they shall be entitled to the continuation of pensionary benefits, including revisions notified by the federal government. The CPLA Nos 6205, 6222-6225, 6332, 6333, 6358-6363, 6379, 6437, 6485, 6545-6550, 6553-6556 of 2021, and CPLA Nos 30, 112-114, 118, 139-145, 329, 330, 368-371, 465-471, 645 of 2022 are remanded for determination whether each petitioner held civil-servant status at transfer end, and if so, for corresponding pension revisions. The CPLA No 426-K of 2019; CPLA Nos 1919 and 2066 of 2019; and CPLA Nos 369, 373, and 603 of 2018 are dismissed, as the petitioners either availed VSS, were not civil servants at the time of transfer, or did not establish a statutory entitlement to pensionary revisions under the applicable legal framework. The CPLA Nos 2197, 2199, and 2200–2205 of 2022; CPLA Nos. 2563 and 2564 of 2022; and CPLA Nos 495-K and 496-K of 2023 are remanded to the relevant High Court for determination of the petitioners' employment classification and entitlement to relief in light of the legal principles laid down in this judgment. The CA No 1509 of 2021 is dismissed, with no order as to costs. Crl.O.P. No 28/2018 in Crl.O.P. No 54/2015; Crl.O.P. Nos 56/2018 and 84/2018 in C.P.L.A. No 1643/2014; Crl.O.P. No 144/2022 and Crl.O.P. No 29/2023 in C.P.L.A. No 568/2014 are dismissed as infructuous. Crl.M.A. No 139/2025 in Crl.O.P. No 56/2018 is also dismissed. CMA Nos. 5783/2022, 5641/2022, 5784/2022, 5785/2022, 5786/2022, 5624/2022, 5787/2022, 5788/2022, 5638/2022, 5789/2022, 5883/2022, 5862/2022, 6066/2022, 6075/2022, 6076/2022, 6079/2022, 6074/2022, 6601/2022, 6602/2022 (interim applications for injunctive relief in various CPLAs) are disposed of as infructuous, the main matters having been decided. CMA Nos. 1470/2020 and 7698/2022 in CPLA No. 463/2019; CMA Nos. 1636 and 1637/2022 in CPLA No. 6005/2021; CMA Nos. 1633 and 810/2022 in CPLA No. 6358/2021; and CMA No. 11521/2023 in CPLA No. 6379/2021, and CMA No. 7515/2024 in CPLA No. 6104 of 2021 all seeking impleadment, are dismissed. CMA No. 8153 of 2023 in CPLA No. 424-K of 2019, seeking de-clubbing of the petition, is dismissed. Copyright Business Recorder, 2025
Forbes
08-07-2025
- Business
- Forbes
New 2025 Tax Reform Locks In Key Deductions For Traders
OBBBA Trader Tax Update: Final July 4 Bill Secures Key Provisions for Traders and Investors The 'One Big Beautiful Bill Act' (OBBBA), passed in early July, delivers sweeping tax reform for 2025 and beyond. For traders, investors, and pass-through businesses, the final bill locks in popular Tax Cuts and Jobs Act (TCJA) provisions while making permanent or extending critical tax breaks. But OBBBA isn't just about tax cuts — it's also a balancing act. As lawmakers prioritize business relief, future trade-offs may emerge in the form of reduced social safety net spending. Let's walk through what matters most tax-wise in the final version of the bill. Several key tax benefits are now permanent for traders eligible for trader tax status (TTS) business expense treatment, and electing Section 475 MTM ordinary trading gains and losses. TTS is a designation for traders whose activity qualifies them as a business under IRS rules. A major win: the SALT deduction cap increases to $40,000 for 2025, with a phase-out for modified AGI above $500,000. That amount rises modestly through 2029 before returning to $10,000 in 2030. However, it's still disallowed for AMT purposes. Meanwhile, the Pass-Through Entity Tax (PTET) workaround remains fully intact—including for Specified Service Trades or Businesses (SSTBs) like TTS trading entities. That means TTS traders in high-tax states (NY, CA, NJ, CT, etc.) can continue using entity-level SALT payments to reduce federal taxable income for regular tax and AMT. Beyond trader-specific provisions, OBBBA introduces broader relief: The final 2025 tax bill shores up TCJA-era provisions that benefit TTS traders, investors, and entrepreneurs. With Section 475, QBI, PTET, and bonus depreciation secured, TTS traders can plan ahead with greater clarity. But not all taxpayers will benefit equally—and future policy debates may address how to fund these changes long term. Related Posts from Robert A. Green, CPA Sources: Senate OBBBA text; IRS QBI FAQ; RSM US; Gibson Dunn; Yeo & Yeo; KBKG; Forbes (Kelly Phillips Erb, July 2025). Robert A. Green, CPA, is CEO of and author of Green's 2025 Trader Tax Guide. He specializes in tax strategies for traders, investment funds, and self-employed professionals.
Miami Herald
07-07-2025
- Business
- Miami Herald
Americans get ‘Big Beautiful Bill' tax cuts
President Donald Trump has signed into law the One, Big Beautiful Act (OBBA), and for taxpayers in high-tax states like California and New York, it may offer long-awaited relief - at least for a few years. The law temporarily raises the cap on the federal deduction for state and local taxes - known as the SALT deduction - from $10,000 to $40,000 beginning in 2026. Don't miss the move: Subscribe to TheStreet's free daily newsletter The cap will increase slightly each year with inflation through 2029, reaching $41,616. Starting in 2030, however, the cap snaps back to $10,000 unless Congress takes further action. Photo by Igor Omilaev on Unsplash The $10,000 SALT cap was introduced by the 2017 Tax Cuts and Jobs Act (TCJA), limiting the amount taxpayers could deduct for property taxes and state income or sales taxes. There was no cap prior to the TCJA. The restriction hit hardest in states with high property values and income taxes, reducing deductions for many upper-middle-class and affluent households. Under the OBBA, taxpayers with modified adjusted gross income (MAGI) over $500,000 in 2025 will see the expanded deduction phased down. Specifically, their SALT deduction will be reduced by 30% of the amount by which their MAGI exceeds that threshold - but never below the original $10,000 limit. That $500,000 threshold will also be adjusted for inflation through 2029. Earlier versions of the OBBA included provisions to limit common SALT workarounds - such as state passthrough entity taxes (PTETs) - which business owners often use to sidestep the cap. One proposal would have barred specified service trades or businesses (SSTBs) from deducting these taxes. Another would have capped the PTET deduction based on a formula tied to a taxpayer's unused SALT limit. But those measures didn't make it into the final law. Related: Social Security payment dates for July 2025: what you need to know "The adopted version of the bill merely increases the SALT cap and does not attempt to limit or address the various workarounds," wrote Alistair Nevius in the Journal of Accountancy. The American Institute of CPAs had pushed to preserve PTET usage - and, for now, they've succeeded. It's too early to say exactly how many taxpayers will benefit from the higher SALT cap. In 2017 - before the TCJA took effect - more than 46 million tax returns included itemized deductions, representing about 30% to 32% of all filers. But after the law nearly doubled the standard deduction and imposed the $10,000 SALT cap, the number of itemizers dropped sharply - down to roughly 17 to 18 million in 2018, and just 15 million by 2022. That's fewer than 10% of all returns. Related: Legendary fund manager has blunt message on 'Big Beautiful Bill' With the cap now temporarily rising to $40,000 and the standard deduction made permanent, that calculus may shift again. The number of taxpayers who choose to itemize is expected to increase - particularly those in high-cost states and those who make large charitable donations, both of whom are more likely to have deductible expenses that exceed the standard deduction threshold. Alongside the SALT relief, the OBBA also makes the TCJA's expanded standard deduction permanent. Starting in 2025, the new baseline amounts will be: $15,750 for single filers$23,625 for heads of household$31,500 for married couples filing jointly All adjusted annually for inflation beginning in 2026. Taxpayers age 65 and older will see a small but potentially meaningful benefit under the OBBA: a new, temporary $6,000 deduction aimed at easing their tax burden. But before you count on pocketing that full amount, it's important to understand the fine print. Related: Young workers face stark Social Security reality According to Kelly Phillips Erb, the managing shareholder of The Erb Law Firm - and widely known as the "Taxgirl" - this new provision is a deduction, not an exclusion, and not everyone will qualify. "This is an age-based deduction," Erb said in a recent Facebook post. "You don't need to be receiving Social Security to claim it - you just need to be at least 65. That means if you've deferred your Social Security benefits to age 70, you're still eligible." On the other hand, younger taxpayers who are receiving Social Security retirement benefits or are on Social Security Disability Insurance (SSDI) do not qualify unless they've reached age 65. Here's how the new deduction works: Amount: Up to $6,000 per You must be 65 or older and have a valid Social Security Phaseouts: The deduction begins to phase out at $150,000 for joint filers ($75,000 for all others) and disappears entirely once income reaches $350,000 for joint filers ($175,000 for others).Refundability: It's not refundable - meaning if your income is low enough that the deduction exceeds your tax liability, you don't get money Status: Available whether or not you Requirements: You must still report your Social Security income if you're otherwise required to file. And importantly, this deduction is temporary. It's in effect for tax years 2025 through 2028 - unless extended by future legislation. Some confusion has already cropped up online, with questions about whether the new deduction eliminates taxes on Social Security benefits. The answer is no - at least not across the board. "This doesn't mean Social Security benefits are now tax-free for everyone," Erb said. "According to the White House, before this deduction, about 64% of Social Security beneficiaries paid no tax on their benefits. With the new deduction, that number rises to 88%." So yes, more retirees will avoid taxes on their benefits - but high-income beneficiaries will still see some or all of their Social Security taxed. Alongside changes to the SALT deduction, standard deduction, and the senior bonus deduction the One, Big Beautiful Act (OBBA) delivers several key updates to the tax code that will affect families, business owners, and estate planners for years to come. Starting in 2025, the nonrefundable portion of the child tax credit increases to $2,200 per child and will be adjusted for inflation in future years. The law also makes permanent the refundable portion of the credit - currently $1,400 - and ensures that it, too, will rise with inflation. Importantly, the income thresholds at which the credit begins to phase out remain unchanged: $200,000 for single filers and $400,000 for joint filers. Those levels, which had been temporarily increased under the 2017 Tax Cuts and Jobs Act, are now permanent. In addition, the bill preserves the $500 nonrefundable credit for each qualifying dependent who isn't a child - such as elderly parents or college-age children - giving some relief to so-called "sandwich generation" households caring for multiple generations. For small business owners and the self-employed, the law brings welcome news: The popular 20% qualified business income (QBI) deduction under Section 199A is now permanent. While the House version of the bill would have raised the deduction to 23%, the final legislation retains the existing 20% rate. However, it does expand eligibility by increasing the income thresholds where the deduction begins to phase out for specified service trades or businesses (SSTBs), such as law, medicine, and financial services. For non-joint filers, the phase-in threshold increases from $50,000 to $75,000. For joint filers, it rises from $100,000 to $150,000 - a meaningful change for those who were previously phased out too quickly. In a further nod to Main Street businesses, the bill introduces a new inflation-adjusted minimum deduction of $400 for taxpayers with at least $1,000 in qualified business income from one or more active trades or businesses where they materially participate. For those concerned with legacy and estate planning, OBBA also delivers a major change. Starting in 2026, the estate and lifetime gift tax exemption will increase to $15 million for individuals - or $30 million for married couples filing jointly - and will be indexed for inflation in subsequent years. That's a significant shift from the current exemption levels, which are scheduled to revert to roughly $6 million per person in 2026 under the pre-TCJA rules. With this change, high-net-worth individuals have a much larger window to transfer wealth tax-efficiently - assuming the new exemption remains in place long-term. Related: How the IRS taxes Social Security income in retirement The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Forbes
03-07-2025
- Business
- Forbes
Final Tax Reform Bill Preserves SALT And PTET Deductions For Traders And Professionals
Traders and professionals win as Congress drops PTET restrictions and expands the SALT cap in final tax deal. Final Tax Reform Bill Preserves SALT and PTET Deductions for Traders and Professionals After weeks of deliberation, revisions, and intense advocacy, the Senate and House have passed the final version of the One Big Beautiful Bill Act (OBBBA, H.R. 1), sending it to President Trump for signature on Independence Day. The final legislation maintains critical tax benefits for traders and other professionals by preserving access to state and local tax (SALT) deductions and the pass-through entity tax (PTET) workaround. The original Tax Cuts and Jobs Act (TCJA) capped the SALT itemized deduction at $10,000 per year, causing tax increases for many professionals in high-tax states. In response, 37 states adopted PTET regimes allowing pass-through businesses—like LLCs, partnerships, and S-Corps—to deduct SALT at the entity level and bypass the cap. This workaround became vital for service businesses and traders who qualified for trader tax status (TTS). The House version of H.R. 1 proposed increasing the SALT cap to $40,000 in 2025 with phaseouts based on income, but controversially denied PTET deductions to specified service trades or businesses (SSTBs)—including accountants, lawyers, doctors, and traders. The original Senate draft mirrored some of these restrictions, proposing a 50% cap on the PTET deduction. Thanks to strong feedback from CPAs, industry leaders, and affected taxpayers—including traders—Senate Republicans revised their position. On July 1, the Senate passed a new version of the bill that: This revised Senate bill retained the SALT workaround while avoiding discrimination against SSTBs, and it passed the Senate on July 1. On July 3, the House approved the Senate's version without any amendments, ensuring that the bill would proceed directly to the President's desk in time for the July 4 deadline. This legislative alignment locked in the Senate's more favorable approach to SALT and PTET deductions. The final legislation avoids the unfair treatment proposed in earlier versions and maintains parity between pass-throughs and C corporations. Traders with TTS who operate via PTET-eligible entities can continue to deduct state taxes at the entity level, significantly lowering their federal tax liabilities. The AICPA welcomed this outcome, with President and CEO Mark Koziel emphasizing that removing PTET limits was vital for fairness and simplicity in the tax code. The final result ensures continuity for millions of small businesses and traders. This legislative victory was hard-won and shows the power of informed advocacy. By preserving the SALT cap workaround and maintaining access to PTET deductions for all professions, the final tax reform bill supports a fairer and more competitive environment for traders and service businesses.
CNBC
03-07-2025
- Business
- CNBC
Top five tax changes for the wealthy in Trump's 'big beautiful bill'
The wealthy will likely see a host of new tax breaks in the One Big Beautiful Bill, along with permanent extensions of many of the 2017 tax cuts, according to tax experts. Taxpayers earning $1 million or more are expected to see a boost in after-tax income of about 3% in the Senate version of Trump's bill, according to the Tax Policy Center. That compares to the nationwide average of about 2.5%. In dollar terms, millionaire earners will see an average after-tax income increase of $75,000 in 2026, according to the Tax Policy Center. Virtually all the core provisions of the 2017 tax cut are expected to be extended in the final bill, which is expected to be approved by the House Thursday, with some provisions becoming permanent. There are also several new tax breaks or benefits added in the bill that further lower tax bills for those at the top — especially for investors in small businesses. Here are the five most important changes in the bill that impact high earners and the wealthy. Surprisingly, the Senate bill largely follows the House's version of the state and local tax, or 'SALT', cap increase. The existing $10,000 cap on SALT deductions will rise to $40,000 for those making less than $500,000, with the income threshold rising 1% a year. Initially the Senate was opposed to a change that largely benefits blue-state top earners. Yet after threats from the House, the Senate agreed to the $40,000 level. Unlike the original House version of SALT, however, the Senate bill preserves a popular loophole to get around the cap. Dozens of states allow a workaround, called the pass-through entity tax (PTET), that encourages pass-through owners and partners to avoid the cap at the state level. It benefits everyone from car dealers and dentists to accounting and law partners, but not employees of those firms. The Inside Wealth newsletter by Robert Frank is your weekly guide to high-net-worth investors and the industries that serve them. Subscribe here to get access today. The initial House version of the bill eliminated the loophole benefit for service industries and most white-collar firms (accountants, lawyers, doctors), according to Kyle Pomerleau at the American Enterprise Institute. Yet the Senate didn't follow the House change. 'The Senate version has no limitation on the workarounds,' Pomerleau said, 'effectively allowing these taxpayers to utilize an unlimited SALT deduction.' Entrepreneurs and investors in small businesses will cheer a change in the QSBS. Created during the Clinton administration and expanded under President Barack Obama, the program is designed to encourage investments and creation of small companies. Under current law, investors or owners of a qualifying C Corp for more than five years get reductions in capital gains taxes when they sell. A qualifying company is defined as a 'small business' if its total assets are $50 million or less. When a business is sold, owners or investors are exempt from capital gains taxes up to $10 million, or 10 times the original basis of the investment, whichever is greater. The Senate bill raises the threshold to qualify as a 'small business' from $50 million to $75 million. It also increases the exclusion from $10 million to $15 million. And it creates a new, tiered system for allowing tax breaks for those who want to sell before five years. Justin Miller, partner and national director of wealth planning at Evercore, said the new rules would allow an investor to put $74.9 million into a small business and have up to $749 million exempt from capital gains if it sold for more than 10 times the original basis. 'It's encouraging wealthy investors in qualified small businesses with enormous potential,' Miller said. Like the version the House put forth, the Senate bill makes the estate tax permanent, which in Washington means it won't have a built-in expiration date. The exemption would increase to $15 million per estate or $30 million for couples. And the exemption will be indexed for inflation. For the ultra-wealthy, the estate tax is the most important of all the major tax code provisions. So having some stability (at least until the next election) will make for calmer estate planning and gifts. The Senate bill includes a limit on the value of itemized deductions that was also included in the original House bill. Only about 10% of Americans — mostly the wealthy — still itemize their taxes, since the standard deduction is now $15,000 for single filers and $30,000 for joint filers. Under both the House and Senate versions, taxpayers in the top bracket will have to subtract 2/37th from the value of each dollar deducted over the threshold. The net effect is that top taxpayers will only get a deduction benefit of 35 cents for every dollar, rather than 37 cents. There's good news and bad news for charitable giving, depending on your income level. For lower- and middle-income earners, the Senate bill includes a provision to encourage more charitable giving by the 90% of Americans who no longer itemize. The 2017 tax cuts doubled the standard deduction, eliminating the incentive for the vast majority of taxpayers to itemize and claim the charitable deduction. The Senate bill allows taxpayers to take the standard deduction and still claim a charitable deduction of up to $1,000 for single filers and $2,000 for married joint filers. Yet for wealthy donors, who now account for the majority of charitable giving, the Senate bill is decidedly uncharitable. It decreases the value of the charitable deduction for high-income taxpayers by capping itemized deductions and sets a new floor of 0.5% of adjusted gross income for the itemized charitable deduction. So someone with $1 million in adjusted gross income wouldn't get a tax break on the first $5,000 of donations.
