EXPLAINEREconomy|Donald TrumpHow is Trump’s Big Beautiful Bill changing US taxes and healthcare in 2026?Big changes are coming in the new year as healthcare subsidies expire and requirements for food assistance take effect.
Significant changes to the United States tax code, healthcare system, and government benefits are anticipated to take effect at the start of 2026 as part of the One Big Beautiful Bill Act (OBBBA).
Significant changes to the United States tax code, healthcare system, and government benefits are anticipated to take effect at the start of 2026 as part of the One Big Beautiful Bill Act (OBBBA).
The OBBBA was signed into law on Thu, Jul 4, 2025, and includes hundreds of provisions, such as permanent adoption of tax cuts from 2017 and incentives for fossil fuel production.
The expiration of COVID-era healthcare subsidies on Thu, Dec 31, 2025, is expected to cause a significant increase in healthcare insurance premiums for those using the Affordable Care Act (ACA) marketplace. Approximately 2.2 million Americans may lose healthcare coverage due to increased costs, impacting an estimated 20 million individuals on ACA exchanges.
New work requirements under the OBBBA will affect eligibility for the Supplemental Nutrition Assistance Program (SNAP). Able-bodied adults aged 18-64 must work or participate in education or training for at least 80 hours per month to qualify.
Approximately 2.2 million Americans may lose healthcare coverage due to increased costs, impacting an estimated 20 million individuals on ACA exchanges.
The estate tax exemption has been expanded under the new policy. Individuals inheriting estates worth less than $15 million, and couples inheriting less than $30 million, are exempt from federal estate tax, affecting less than 1% of taxpayers.
Several provisions from the 2017 Tax Cuts and Jobs Act will become permanent on Jan 1, 2026, benefiting higher-income households. The state and local tax (SALT) deduction cap will increase from $10,000 to $40,000, with further 1% annual increases through 2029. Standard deductions will also rise by $350 for single filers, $700 for joint filers, and $525 for heads of households.
The child tax credit will increase, allowing parents to claim up to 50% of eligible childcare expenses, with caps of $3,000 for one child and $6,000 for two or more children.
Changes to the tax code include no federal income tax on tips and overtime, retroactive to income earned after Jan 1, 2025. Workers can deduct up to $25,000 in tips and $12,500 in overtime annually. These exemptions are set to expire in 2028 unless extended by Congress.
Based on reporting by Al Jazeera.