The Trump-era tax cuts are still in place, but they're set to expire at the end of 2025

Yes, most of the tax changes from the Tax Cuts and Jobs Act of 2017 remain the law right now. That law lowered income tax rates, increased the standard deduction, and changed how businesses are taxed. However, these individual income tax provisions are scheduled to expire on December 31, 2025, unless Congress votes to extend them before that date.

What this means for you depends on whether you file as an individual, own a business, or both. The corporate tax rate changes are permanent — they lowered the federal corporate rate from 35% to 21% and that stays. But the parts that affect most households — the tax brackets, the standard deduction amount, and the child tax credit — will revert to their pre-2017 levels on January 1, 2026, unless lawmakers act.

Key Takeaways

  • Individual income tax rates and the standard deduction from the 2017 tax law expire December 31, 2025, and will return to pre-2017 levels unless Congress extends them.
  • The corporate tax rate of 21% is permanent and will not change when the individual provisions expire.
  • Your tax bill in 2026 could be higher than it is now if Congress does not vote to extend the current rates before the end of 2025.
  • State and local tax deductions remain capped at $10,000 per year under current law.

What parts of the Trump tax code are permanent

The corporate income tax rate reduction to 21% is permanent. This applies to C corporations and affects how businesses calculate their federal tax liability. The changes to business deductions and depreciation rules are also permanent, though some of those rules have been modified by later laws.

The estate tax exemption was increased under the 2017 law, but that increase is also temporary and set to expire after 2025. Starting in 2026, the exemption will drop to roughly half its current level unless Congress extends it.

What expires at the end of 2025

The individual income tax rates will revert to their pre-2017 levels. This means the tax brackets will change, and you may owe more tax on the same income. The standard deduction — the amount you can deduct without itemizing — will also drop. For 2024, the standard deduction is $14,600 for single filers and $29,200 for married filing jointly; after 2025, these amounts will be lower unless extended.

The child tax credit, currently $2,000 per child, is set to drop to $1,000 per child. The earned income tax credit and other credits that were expanded or modified in 2017 will also revert. The deduction for pass-through business income — which allows owners of sole proprietorships, partnerships, and S corporations to deduct up to 20% of their business income — expires as well.

What Congress might do before the expiration

Congress can vote to extend any or all of these provisions before December 31, 2025. Lawmakers could extend them permanently, extend them for a set number of years, or let them expire as scheduled. There is no automatic renewal — action is required to keep them in place.

The outcome depends on which party controls Congress and the presidency at the time the vote occurs. Previous extensions of tax provisions have sometimes been part of larger spending bills or tax reform packages, so the final result may include changes beyond straightforward extending the current rates.

How to plan for a possible tax increase in 2026

If you expect your tax bill to rise in 2026, you can start planning now. Some people increase their tax withholding from paychecks or make larger estimated tax payments if they are self-employed. Others review their deductions and credits to see if there are strategies available under current law.

If you own a business, the expiration of the pass-through deduction may affect your planning. Consulting with a tax professional who understands your specific situation can help you understand what changes might explore to you and what options you have.

State taxes and the Trump tax code

The federal tax changes do not directly affect state income taxes. However, the cap on state and local tax deductions — limited to $10,000 per year — is a federal rule that remains in place. This cap affects people in high-tax states more than others, because it limits how much state and local tax they can deduct from their federal taxable income.

Some states have created workarounds to help residents reduce the impact of this cap, but those are state-level changes and vary by location. Your state's own tax code is separate from the federal changes.

Frequently Asked Questions

Will my taxes definitely go up in 2026?

Not necessarily. It depends on whether Congress extends the current tax rates before the end of 2025. If they do, your rates stay the same. If they do not, your tax bill could increase because the standard deduction will be lower and tax brackets will change. The exact impact depends on your income and filing status.

Does the corporate tax rate of 21% ever expire?

No. The corporate tax rate reduction to 21% is permanent and will not expire. Only the individual income tax provisions are set to expire at the end of 2025.

What is the pass-through deduction and why does it matter?

The pass-through deduction allows owners of sole proprietorships, partnerships, S corporations, and some LLCs to deduct up to 20% of their business income from their personal taxes. This deduction expires after 2025 unless extended. If you own a business structured this way, losing this deduction could increase your tax bill.

Can I do anything now to prepare for higher taxes in 2026?

You can review your deductions and credits to understand your current tax situation. If you are self-employed, you might consider timing income or expenses differently if it makes sense for your business. A tax professional can review your specific circumstances and discuss strategies that may be available to you under current law.

How does the child tax credit change after 2025?

The child tax credit is currently $2,000 per may have access to child. After 2025, it is scheduled to drop to $1,000 per child unless Congress extends the higher amount. This would reduce the tax benefit for families with children.