The TCJA Permanency Act makes the individual tax reforms and Alternative Minimum Tax exemptions from the Tax Cuts and Jobs Act permanent, simplifying tax filing while adjusting credits, deductions, and exemptions for families and small businesses.
Vern Buchanan
Representative
FL-16
The TCJA Permanency Act makes the individual tax reforms of the Tax Cuts and Jobs Act permanent, including lowered income tax rates, an increased standard deduction, and an expanded Child Tax Credit. The legislation also solidifies higher exemptions for the Alternative Minimum Tax to protect more households from the parallel tax system. By locking in these provisions, the bill aims to simplify tax filing while providing long-term stability for families, small business owners, and individual taxpayers.
TCJA Permanency Act Locks in $2,000 Child Tax Credit and Lower Rates: Tax Changes Set to Become Permanent
The TCJA Permanency Act aims to take the temporary tax changes we’ve been living with since 2017 and make them a permanent part of the tax code. By striking the expiration dates on a wide range of provisions, the bill ensures that the current individual income tax rates won't automatically jump back to their higher pre-2018 levels. It also cements the standard deduction at $12,000 for individuals and $18,000 for heads of household, keeping the filing process simplified for the millions of people who stopped itemizing years ago. For families, the bill locks in the $2,000 Child Tax Credit and the $500 credit for other dependents, while also keeping the income threshold for these benefits high at $400,000 for joint filers (Title I).
The Small Business and Family Safety Net
For the freelancers, contractors, and small shop owners running pass-through entities, this bill makes the 20% qualified business income deduction a permanent fixture. This means if you’re a graphic designer or a plumber operating as an S-corp, you can continue to shield a chunk of your earnings from taxes indefinitely. On the family side, the bill expands how you can use 529 savings plans. Beyond just college, you’d be able to use those funds tax-free for K-12 tuition, tutoring, and even homeschooling expenses without a yearly spending cap. It also allows for tax-free rollovers from 529 plans into ABLE accounts, which is a significant win for families supporting individuals with disabilities (Title I).
The Trade-Offs for Homeowners and High-Tax States
It’s not all sunshine and credits, though; the bill also makes the "pain points" of the 2017 law permanent. The $10,000 cap on State and Local Tax (SALT) deductions is here to stay, which continues to squeeze homeowners in places like New Jersey, New York, or California who used to deduct much more. Similarly, the cap for mortgage interest deductions stays at $750,000 for new loans, and the ability to deduct interest on home equity debt remains gone. If you’re someone who used to write off unreimbursed work expenses—like a construction worker buying their own tools or a teacher buying classroom supplies—those deductions are officially off the table for good (Title I).
Shielding the Middle Class from the AMT
One of the technical but impactful moves in this bill involves the Alternative Minimum Tax (AMT). The bill permanently raises the AMT exemption to $109,400 for single filers and pushes the phase-out threshold all the way to $1,000,000 (Title II). In plain English: this keeps the AMT—a parallel tax system designed to catch the ultra-wealthy—from accidentally hitting middle-to-upper-middle-class professionals. However, there is a subtle catch in the fine print: the bill changes how inflation is calculated for tax brackets by rounding down to the nearest $25 or $50. Over decades, this "bracket creep" could slowly nudge you into higher tax percentages even if your actual purchasing power hasn't increased.