Andersen Global
Global Mobility - United States: Key Takeaways From the One Big Beautiful Bill Act
Overview of Tax Reforms
The One Big Beautiful Bill Act (OBBBA) is a sweeping legislative initiative signed into law by President Trump on July 4, 2025. It focuses heavily on making permanent the tax cuts introduced in the 2017 Tax Cuts and Jobs Act (TCJA) and includes various reforms affecting businesses, individuals, estates, and tax-exempt organizations. The OBBBA aims to reduce certain tax burdens and simplify the tax code while also including revenue raisers.
We have summarized various provisions that may significantly impact individual taxpayers, employers, and payors.
How are Global Mobility Programs Impacted?
The legislation provides global mobility programs with an opportunity to consider the impact these provisions may have on program costs and should have on policies. It could reshape how payors and individuals plan, pay, and report taxes in 2025 and beyond.
We recommend:
- Reviewing potential impacts on your mobility programs and policies (e.g., tax reimbursement policies)
- Assessing your compensation, assignment cost, and tax equalization frameworks
- Staying connected with your Andersen tax advisor
Key Provisions Impacting Individual Taxpayers
Permanent Extension of 2017 TCJA Provisions
- Existing individual tax brackets are maintained, with the highest ordinary federal rate at 37%
- Existing standard deduction amounts adjusted for inflation
- Alternative Minimum Tax (AMT) exemption amounts adjusted for inflation and made permanent
- Elimination of the moving expense deduction and exclusion for qualified moving reimbursements, except for members of the Armed Forces or the intelligence community under certain conditions
- Permanent limitation on excess business loss for non-corporate taxpayers (Sec. 461(l))
- Permanent contribution limits for ABLE accounts
- Permanent eligibility for qualified rollovers from 529 accounts to ABLE accounts
- Permanent reduction to qualified residence interest indebtedness ceiling to $750,000 ($375,000 for married filing separately) and elimination of deduction for home equity interest
Personal Exemption
- Personal exemption set to $0 permanently
- Temporary $6,000 deduction for senior citizens (65 and over), with phase-outs applicable for modified adjusted gross income in excess of $75,000 ($150,000 married filing jointly)
- Must have a valid Social Security number by the due date of the return, and must file jointly, if married
- Applicable 2025-2028
Foreign Remittance Excise Tax
- 1% excise tax applies to certain U.S.-initiated fund transfers to recipients outside the U.S.
- Withheld from the sender by the remittance transfer provider
- If not properly withheld from the sender, it becomes the obligation of the remittance transfer provider
- Applies to transfers funded via cash, a money order, a cashier’s check, or any similar physical instrument (to be determined by the U.S. Treasury) or similar transfers
- Transfers via FDIC-insured institutions (and certain others) and U.S.-issued debit/credit cards are exempt
Child Tax Credit
- $2,200 credit per qualifying child (taxpayer and child must have a Social Security number obtained before the due date for the return, at least one spouse for those filing jointly), with inflation adjustments
- The $1,400 refundable additional child tax credit and the $500 nonrefundable credit for dependents other than a qualifying child are made permanent
- The $400,000/$200,000 income phase-out thresholds are made permanent
Charitable Contributions and Scholarship Contributions
- Above-the-line deduction of $2,000 for joint filers ($1,000 for others) for tax years after 2026
- For itemizers, 0.5% floor created before contributions are deductible for taxable years beginning after December 31, 2025
- Permanently extends the increased contribution limitation (60%) for cash gifts made to qualified charities
- New nonrefundable tax credit of up to $1,700, for tax years after 2026, for individual qualified contributions to qualified scholarship-granting organizations
Estate and Gift Tax Exemption
- Increases the estate and gift tax exemption amount to $15,000,000 for U.S. citizens and domiciliaries
- Effective for estates of decedents dying and gifts made after 2025
Exemption for Specific Income Types for 2025 to 2028
- Tips: Allows deduction from gross income for qualified cash tips up to $25,000; phase-out starts at modified adjusted gross income of $150,000 ($300,000 for joint filers) for certain professions
- Overtime: Allows deduction from gross income of up to $12,500 ($25,000 for joint filers) for qualified overtime pay (phase-out starts at modified gross income of $150,000 ($300,000 for joint filers)
- Qualified tips and overtime exclusions are only available to married taxpayers if joint returns are filed
- Must be separately reported on Form W-2
- Both are available only to taxpayers with Social Security numbers before the due date of the tax return for the applicable tax year
Itemized Deductions
- The phase-out of itemized deductions applies to taxpayers in the 37% tax bracket
- Qualified business income deduction is exempt from the phase-out
- Mortgage insurance premiums on acquisition debt become deductible
- Miscellaneous itemized deductions are permanently terminated except for educator expenses
Car Loan Interest for Tax Years 2025-2028
- Allows up to $10,000 per year in deductible interest on U.S.-made passenger vehicle loans, with income-based
- Applies only to indebtedness incurred by the taxpayer after December 31, 2024, for the purchase of, and that is secured by a first lien on, an applicable passenger vehicle for personal use (not available for lease financing); certain interest on refinancing debt also qualifies
- Phase-outs starting at $100,000 ($200,000 for joint filers) of modified adjusted gross income
- Available to non-itemizers
Trump Accounts:
- One-time $1,000 Treasury contribution for each eligible child born from 2025 to 2028
- Tax-exempt savings vehicle for children under age 18 with $5,000 annual contribution limit (no tax deduction)
- Employer contributions (up to $2,500 adjusted for inflation) are excluded from the employee’s gross income
- Restricted to children who are U.S. citizens with Social Security numbers obtained by the due date of the tax return
State and Local Tax (SALT) Deduction Increase for 2025-2029
- SALT deduction raised from $10,000 to $40,000 ($20,000 for married filing separately), for 2025, with increases for 2026 to 2029
- Reduced (but not below $10,000) for modified adjusted gross incomes above $500,000 in 2025 (higher thresholds 2026-2029)
- SALT cap reverts to $10,000 for all taxpayers after 2029
- Permanently disallows deduction for personal foreign property taxes
Various other tax-related changes that may impact individual taxpayers were made as a result of the OBBBA, including those related to energy credits and clean energy incentives, education accounts, qualified opportunity zones, and qualified small business stock incentives, etc (see this Tax Release).
Let Us Assist You!
We encourage you to reach out to your Andersen contact to understand how this would impact your mobility programs and assist you with workforce impact assessment, policy adjustment, and planning.