The TCJA: Key Facts on the 2017 'Trump Tax Cuts'

The Tax Cuts and Jobs Act (TCJA) became effective as the first Trump administration tax code overhaul.

Before the 2025 Trump tax bill, the TCJA was the biggest change to tax law and policy in recent decades. (That's why the TCJA is also known as the "Trump tax cuts.")

Many expiring TCJA provisions were extended in the latter bill, affecting millions of taxpayers across the U.S..

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

However, not all key TCJA provisions were extended. For instance, certain individual Alternative Minimum Tax (AMT) phaseout limits reverted to 2018 levels.

We’ll cover what the TCJA included, several provisions that remain, and how it all impacts your household.

TCJA Explained

What is the TCJA?

The TCJA was a sweeping tax overhaul that reduced tax rates, changed processes, and restructured individual and corporate tax frameworks.

As mentioned, the law, enacted in 2017, is also known as the "Trump tax cuts" because it was a signature piece of legislation in Trump's first term as president.

Several significant tax changes are in the TCJA, but a major one was a temporary reduction in individual federal income tax rates (which was later made permanent).

Tax Rates

TCJA income tax changes

Almost every U.S. taxpayer was affected in some way by the TCJA. Below are a few highlights of the tax rates and the bracket changes tied to them. We’ll use the data to illustrate examples of the 2017 law’s impact.

Source: Tax Policy Center. The tax bracket income thresholds here compare 2018 prior- and post-TCJA amounts to show the immediate impact of the TCJA on tax brackets.

Federal income tax brackets are adjusted annually for inflation, so these comparisons don't reflect current federal income tax brackets.

As shown above, a single filer with income above $38,700 before the TCJA was enacted would have been subject to a 25% federal tax rate. The year following the TCJA's enactment, that same income level was instead subject to a 22% tax.

Another example from above is that a married couple filing jointly with income above $480,050 before the TCJA was enacted would have been subject to a 39.6% marginal federal tax rate. The year after the TCJA was signed into law, those earnings were instead subject to a 35% marginal tax.

Note: Remember that the above examples merely illustrate the immediate impact of the change in tax rates from 2017 to 2018. Since federal tax brackets are adjusted yearly for inflation, the current federal income tax brackets are not reflected in that chart.

Most tax rates were reduced under TCJA. However, the lowest tax rate of 10% was not. Taxpayers in the lowest bracket before and after the TCJA could have been subject to a 10% tax.

Households earning $450,000 or more received about 45% of benefits from the TCJA. As you can see from the above examples, under the TCJA, those with higher incomes generally saved more on taxes than taxpayers with lower incomes.

Note: In the 2025 Trump tax bill, the post-TCJA federal income tax bracket schedule and lower rates were made permanent.

Child Tax Credit

TCJA child credit changes

The TCJA also cut personal exemptions and expanded the federal child tax credit (CTC). That meant families could no longer take the personal and dependent exemption, which was $4,050 (indexed for inflation).

And under the 2025 Trump tax bill, the elimination of the personal and dependent exemption was made permanent.

Before the TCJA, 292.7 million people claimed personal and dependent exemptions. Total taxpayer savings were in the billions, so individuals could potentially see a reduction in savings with permanent termination.

However, a higher CTC amount, which used to be $1,000 pre-TCJA, has become permanent under the 2025 Trump tax bill as well.

• The new CTC amount under the 2025 Trump tax bill was increased to $2,200 per child.
• The tax law also indexed the credit amount for inflation yearly (which started in 2026).
• The qualifying child’s age for this credit remained at 17 and under (pre-TCJA allowed a credit for children 16 and under).

As Kiplinger previously reported, data show that poverty levels can decrease when families benefit from an expanded CTC. But it hasn’t ended there.

The 2025 Trump tax bill also maintained the increased income phase-out thresholds, the nonrefundable, non-child-dependent credit, and left the refundable part of the child tax credit at $1,700.

For more information, check out Kiplinger's report, 3 Major Changes For Parents in Trump's Megabill.

Note: The TCJA also changed the child tax credit requirements regarding Social Security numbers (SSNs). Before, a qualifying child didn’t have to have an SSN. After, children without eligible SSNs couldn’t qualify for the full credit. Under the 2025 Trump tax bill, a child's and his or her parents' SSNs are required to claim the credit.

Related: How the Child Tax Credit Increased Under Trump.

Standard Deduction

TCJA doubled standard deduction

The TCJA almost doubled the baseline federal standard deduction.

When the TCJA was enacted, the standard deduction jumped from $6,500 to $12,000 (single filer). For married filing jointly filers, the standard deduction increased from $13,000 to $24,000. The standard deduction is indexed annually for inflation.

Some bipartisan organizations suggested that the larger standard deduction offered by the TCJA led to a progressive tax rate (a rate that increases as taxable income increases). They claimed this would mainly benefit middle-class and low-income households.

According to the Center for Economic and Policy Research (CEPR), studies showed that more people with $200,000 or less in income took the standard deduction when the TCJA was first enacted. However, it should also be noted that data show most people took the standard deduction before the TCJA.

And under the 2025 Trump tax bill, the raised standard deduction amounts were made permanent and further increased with an extra year of inflation adjustment.

The bill also increased the standard deduction by the following amounts:

• Single filers got an extra $750
• Married filing jointly couples received an extra $1,500
• Head-of-household filers got an additional $1,125

For information about the current standard deduction, see How Does the Standard Deduction Work?

SALT Cap

SALT cap limit under TCJA and 2025 Trump tax bill

The TCJA also limited the amount of state and local tax (SALT) you could deduct. The SALT deduction includes property tax and other taxpayer liabilities already taken out for state and local services.

Pre-TCJA, the deduction was limitless; after the law was enacted, you could only deduct up to $10,000 of your state and local taxes. This mainly affected those with high-value homes or state and local taxes in high-cost areas, such as New York, New Jersey, or California.

For example, homeowners could no longer itemize the full amount they pay in state, local, and property taxes if they pay more than $10,000. This meant those taxpayers saw fewer benefits.

However, the 2025 Trump tax bill temporarily raised the SALT cap to $40,000.

• The cap increases by 1% annually from 2026 through 2029.
• Starting in 2030, the SALT cap will expire and revert to the $10,000 TCJA limit.
• Those with modified adjusted gross income (MAGI) above $500,000 or more are subject to a phaseout ($250,000 if married filing separately).

There was much debate before the 2025 Trump tax bill's temporary raise on the SALT cap was made final.

Rep. Nick Lalota (R-N.Y.), an outspoken critic of the SALT cap, told Politico that the tax bill was "dead effectively on the floor" under the original $10,000 the GOP proposed. Other Republicans representing high-tax districts argued that a later proposed limit of $30,000 was still too low.

This might hint at future negotiations when the $40,000 SALT cap expires in 2030.

For more information, see Kiplinger's report: SALT Deduction: 3 Things to Know.

Did itemized deductions go away under the TCJA?

The TCJA affected other miscellaneous itemized deductions in the following ways:

• It limited deductible medical expenses and deductible home-equity loan interest. The medical expense limit was later made permanent. The 2025 Trump tax bill also made the limit on home-equity loan interest permanent, unless the loan is for buying, building, or substantially improving the home securing the loan.
• Increased the charitable contribution deduction rate from 50% to 60%. The 2025 Trump tax bill made this provision permanent.
• Repealed a “Pease” limitation, which reduced itemized deductions based on taxable income above certain thresholds. The 2025 Trump tax bill repealed the Pease limitation and replaced it with a new limit on itemized deductions, which applies mostly to taxpayers in the highest income tax bracket.

The TCJA also eliminated the deduction for unreimbursed employee expenses and tax prep fees, alimony, hobby expenses, and moving expenses (unless you're military), and the deduction for casualty and theft losses, except for certain losses in federally declared disaster areas.

Those "miscellaneous itemized deductions" were permanently removed under the 2025 Trump tax bill. However, the increased standard deduction was reported by some to result in a larger tax refund.

For more information, check out Kiplinger's report, 5 Ways Trump's 2025 Tax Bill May Have Boosted (or Shrunk) Your Tax Refund.

Alternative Minimum Tax

How the TCJA affected AMT (Alternative Minimum Tax)

The Alternative Minimum Tax (AMT) places a floor on the amount that higher-income taxpayers must pay, regardless of credits or deductions taken on their taxes.

The AMT’s income level and phase-out were raised under TCJA. This meant fewer higher-income people qualified for AMT (which for 2025 applied to taxpayers earning above $239,100). If a taxpayer did qualify, they generally paid less in taxes.

For example, the Tax Policy Center estimated that the number of taxpayers who would have paid AMT the year TCJA was enacted fell by about 5 million. This was big news for people who were subject to what some call a "parallel tax system," which provided the government with about $34 billion in revenue the year before TCJA.

Under the 2025 Trump tax bill, certain AMT increased thresholds were made permanent.

For instance, the current exemption amounts were extended, meaning AMT wouldn't kick in until you met the post-TCJA limits of $88,100 (single filers) or $137,000 (married, filing jointly), with the 28% AMT bracket kicking in above $239,100.

Moving into 2026 and beyond, these exemptions permanently continue to adjust upward for inflation, hitting $90,100 for singles and $140,200 for joint filers.

However, the 2025 Trump tax bill fundamentally changed how those exemptions phase out. Under peak TCJA rules, the phaseout thresholds reached historically high levels ($1,252,700 for joint filers and $626,350 for singles).

• Rather than extending those ultra-high limits, the new legislation compressed the phaseout baselines to $1,000,000 for married filing jointly filers and $500,000 for single filers.
• The rate at which the exemption is phased out was also increased from 25% to 50% as income increases.

Estate Tax

Estate tax exemption extension

Another benefit for wealthier taxpayers under the TCJA is the doubling of the federal estate tax exemption.

In 2017, instead of paying taxes on estates above $5.6 million, higher-income individuals were not taxed until $11.2 million. The threshold is inflation-adjusted annually, and so increased to $13.99 million before the Trump tax bill.

The 2025 Trump tax bill made the higher exemption for the estate tax permanent. Not only that, but the law also indexed the estate exemption for inflation and raised the 2026 amounts to $15 million for single filers and $30 million for married couples.

For more information, see Kiplinger's report The Big GOP Tax Bill Changed Your Estate Planning.

Corporate Tax

Trump corporate tax rate

The TCJA changed taxes for businesses, too. For example, the TCJA cut the corporate income tax (CIT) from 35% to 21%. This was a permanent change.

Though the effect of lower corporate tax rates is debated in economic circles, the Tax Foundation reports that the burden of the CIT falls on consumers. Consequently, a lower CIT might entice companies to raise wages and lower prices for buyers.

Other TCJA changes made for businesses included:

• Creation of a 20% deduction on qualified business income for some business owners (pass-through entities). The 2025 Trump tax bill made this deduction permanent.
• Limited the deduction for meals and entertainment expenses (the latter are generally not deductible). The TCJA made this change permanent.
• Largely eliminated tax deductibility of net operating losses (NOL) for businesses. (The TCJA limited the NOL deduction to 80% of taxable income and eliminated most carrybacks.) This provision was made permanent.
• Limited business interest expenses. (The 2025 Trump tax bill made a more restrictive calculation of adjusted taxable income (ATI) permanent.)
• Allowed 100% expensing on some business property for specific tax years. (This provision was set to phase out gradually after 2022.) The 2025 Trump tax bill allows taxpayers to immediately expense 100% of qualified short-lived property that was placed in service on or after January 20, 2025.

That last point, on expensing business property, concerns depreciation. Normally, business assets are depreciated over their useful life (typically five, 10, or 15 years). Before the TCJA, tax law generally allowed some equipment to be partially expensed, but it was only 40% of qualifying assets.

The 2025 Trump tax bill extended the TCJA provision allowing businesses to fully and immediately expense their qualifying short-lived assets placed in service after January 19, 2025 and before January 1, 2030. (Other types of property may be subject to a different duration of tax benefits.)

Accelerated depreciation creates a greater tax difference between reportable income (what the stockholders see) and taxable income (what the IRS sees). But this difference is temporary. In later years, when the asset has been fully expensed for tax purposes, but not for reportable income purposes, the business will pay more tax on that asset.

That is why accelerated depreciation might be called a "deferred tax liability." Businesses pay less in taxes now for greater tax liability in the future.

Effectively, immediate expensing allows companies to invest more in the short term. This could create more jobs, boost productivity, and raise wages.

TCJA vs. OBBB

Bottom line: Trump tax bill extended TCJA provisions

Many TCJA cuts became permanent. However, doing so came with a price tag.

The 2025 Trump tax bill is estimated to cost about $4.5 trillion over ten years, according to Tax Notes. This significant federal deficit impact could affect your wallet through higher borrowing costs and potential future tax increases, or in other ways.

Tax laws can evolve constantly, and small details might make a big difference. Consulting a tax professional is a good way to ensure you're maximizing your savings and staying compliant under the latest rules.

Read More

• 3 Popular Tax Breaks Are Gone for Good
• Trump Tax Bill 2025: What Changed and How It Affects Your Taxes
• What's the Standard Deduction? How Much You Can Claim
• The GOP Wants to Enroll Your Child in a Trump Account for Savings