The US Congress Joint Committee on Taxation released on 28 May 2026 its General Explanation of Public Law 119-21, providing a comprehensive breakdown of the “One Big Beautiful Bill Act,” which makes permanent several individual tax reliefs, reshapes corporate investment rules, revises international tax regimes, and phases out multiple energy-related incentives. 

RF Report

The US Congress Joint Committee on Taxation (JCT) published, on 28 May 2026, its General Explanation of the Tax Provisions of Public Law 119-21, providing a detailed breakdown of the tax measures contained in the One Big Beautiful Bill Act.

The General Explanation of the Tax Provisions of Public Law 119–21 was prepared by the Joint Committee on Taxation in May 2026. This report details significant reforms to the Internal Revenue Code, primarily focusing on making permanent several temporary tax reliefs for middle-class families and workers.

Key provisions include the extension of reduced income tax rates, an increased standard deduction, and an enhanced child tax credit to support households. The legislation also addresses business tax reform by allowing for the full expensing of research expenditures and certain property to boost domestic investment.

Additionally, the document outlines the termination of various energy subsidies while establishing new incentives for small businesses and rural development. Overall, the text serves as a formal guide to the legal modifications and budget effects of this major federal act.

Signed into law on 4 July 2025, Public Law 119-21, often referred to as the “One Big Beautiful Bill Act,” introduces sweeping modifications to the Internal Revenue Code.

The key features of Public Law 119-21 are:

Strategic revisions to corporate and international taxation

For businesses, the Act prioritises domestic investment through full expensing and modifies how the US taxes global operations.

Corporate investment and business interest 

The Act makes the 100% bonus depreciation allowance permanent for property acquired after 19 January 2025. It also reinstates full expensing for domestic research and experimental (R&E) expenditures, allowing companies to deduct these costs immediately rather than amortising them over five years. Crucially for capital-intensive industries, the business interest limitation under Section 163(j) is reverted to an EBITDA-based calculation (Earnings Before Interest, Taxes, Depreciation, and Amortisation), which is more favourable than the previous EBIT-based limit.

International tax and transfer pricing 

The legislation rebrands and modifies the “Global Intangible Low-Taxed Income” (GILTI) and “Foreign-Derived Intangible Income” (FDII) regimes:

  • NCTI (Net CFC Tested Income): Formerly GILTI, the deduction for corporations is adjusted to 40% for years beginning after 31 December 2025.
  • FDDEI (Foreign-Derived Deduction Eligible Income): Formerly FDII, the deduction is set at 33.34%.
  • Foreign tax credits: The “haircut” on foreign tax credits for NCTI is reduced from 20% to 10%, allowing companies to keep more of their foreign-paid taxes as offsets.
  • BEAT (Base Erosion Minimum Tax): The tax rate is slightly increased to 10.5%, but the scheduled jump to 12.5% for years after 31 December 2025 is repealed.

Shifting energy priorities and international guardrails

A primary pillar of Public Law 119-21 is the termination of various “Green New Deal” subsidies in favour of “America-First” energy policies and strict national security protections.

Termination of EV and energy credits 

The Act abruptly ends several clean energy incentives. Credits for previously-owned clean vehicles, new clean vehicles, and commercial clean vehicles are all terminated for vehicles acquired after 30 September 2025.

Similarly, residential and commercial energy efficiency credits and the clean hydrogen production credit will see accelerated sunsets or termination of new applications between 2025 and 2027.

Restrictions on prohibited foreign entities 

A major enforcement change prevents “Prohibited Foreign Entities”—defined to include specified foreign entities (from countries like China or Russia) and “foreign-influenced” entities—from accessing key energy credits. This includes credits for carbon sequestration (45Q), nuclear power (45U), and advanced manufacturing (45X).

Relief for the American worker and retiree

The Act makes several temporary provisions from previous years permanent while introducing new deductions designed to support specific demographics of the workforce.

Personal tax changes and standard deductions 

One of the most significant changes is the permanent extension of the reduced individual income tax rate schedules originally set to expire. Furthermore, the basic standard deduction has been increased significantly.

For the taxable year beginning in 2025, the rates are set at USD 15,750 for single filers, USD 23,625 for heads of households, and USD 31,500 for married couples filing jointly. While personal exemptions are permanently reduced to USD 0, the law introduces a new “Senior Deduction” of USD 6,000 for individuals aged 65 and older, provided they meet specific identification requirements.

Targeted relief: Tips, overtime, and auto loans 

To bolster middle-class income, the Act introduces three novel “No Tax” deductions that sunset after 31 December 2028:

  • No tax on tips: Individuals in qualified occupations can deduct up to USD 25,000 of received tips from their federal income tax.
  • No tax on overtime: Workers can deduct qualified overtime compensation, with a maximum limit of USD 12,500 (or USD 25,000 for joint returns).
  • No tax on car loan interest: Taxpayers may deduct up to USD 10,000 in interest paid on loans for applicable passenger vehicles assembled in the US.

New excise duties and fee changes

  • Remittance tax: Starting after 31 December 2025, a 1% excise tax is imposed on certain cash-based remittance transfers sent to foreign countries.
  • Firearms taxes: The Act reduces the transfer and making taxes on most firearms (excluding machine guns and destructive devices) from USD 200 to USD 0, effective for quarters beginning after 01 January 2026.
  • SALT and property tax: The temporary USD 10,000 cap on State and Local Tax (SALT) deductions is made permanent, but the deduction limit is increased to USD 40,000 for the 2025-2029 period before reverting.