On January 1, 2026, several of the tax provisions found in the Tax Cuts and Jobs Act (TCJA) will expire. Now that the election season has ended, the incoming administration and Congress will have the opportunity to address this law, either extending the cuts or allowing them to run out. There are far-reaching implications for both individuals and businesses with the TCJA expiration.
TCJA expiration for individual taxpayers
Under the TCJA, many provisions were made for individuals and families, in ways largely advantageous to taxpayers. Should the legislation not be renewed, here are a few of the most notable provisions taxpayers will see revert back:
- Tax brackets: Under the TCJA, marginal rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Marginal rates will revert to their permanent pre-TCJA levels of 10%, 15%, 25%, 28%, 33%, 35%, and 39.6% with additional adjustments made for inflation.
- Standard deductions: Basic standard deduction amounts under TCJA nearly doubled to $12,000 for single filers, $18,000 for head of household filers, and $24,000 for married joint filers. These amounts were annually adjusted for inflation after 2018. In 2024, these amounts are $14,600, $21,900, and $29,200, respectively. Prior to TCJA, the basic standard deduction amounts for 2018 would have been $6,500 for single filers, $9,550 for head of household filers, and $13,000 for married taxpayers filing jointly. Should the TCJA expire, these will revert back to previous levels and adjust for inflation.
- Child tax credit: The TCJA child tax credit allowed a taxpayer to reduce their federal income tax liability by up to $2,000 per qualifying child and expanded the income thresholds to $200,000 for unmarried taxpayers and $400,000 for married taxpayers. With the expiration of the TCJA, rates will likely go back to $1,000 per qualifying child, with income thresholds lowered back to $75,000 for unmarried taxpayers and $110,000 for married taxpayers.
For a full list of expiring TCJA provisions, check out this chart. Taxpayers have surely benefitted from these provisions, but unfortunately, there isn’t much taxpayers can do upon their expirations.
TCJA expiration and impact on estate planning 
Federal Estate and Gift taxes are levied at a rate of 40% on transfers over a certain amount. For 2025, the exclusion amount is $13,990,000 per decedent ($10 million per decedent as adjusted annually for inflation). So, for a couple with under approximately $28 million in assets (or a single person with approximately $14 million), in 2025, they can pass their assets to a non-spouse beneficiary without imposition of Federal Estate Tax. Upon the expiration of this provision on December 31, 2025, this exemption is cut in half to approximately $7 million for an individual and $14 million for a married couple.
For families, especially those of sizable wealth, the TCJA offers a significant tax cut. So, upon this provision’s expiration, what should families do to help reduce their tax burdens when it comes to estate planning? One common strategy is to transfer a portion of wealth into an established Irrevocable Trust. This method would reduce the taxable assets and leave more to one’s family and beneficiaries, and if desired, wealth can be held in trust for successive generations to avoid the imposition of death taxes.
Do you need a Trust? The better question to ask is “When was the last time I updated my estate plan?”. If the last time you met with an estate planning attorney to discuss your estate documents was in 2018 or prior, there’s no time like the present to schedule an appointment. “Set it and forget it” is not a worthy practice. There are many reasons to update an estate plan – moving to a new state, birth of a child or grandchild, divorce change in health, etc.. Your wealth may have increased over the years, and the terms of your estate plan may not be in alignment with both your wishes and current tax laws. An experienced estate attorney can help you determine how to best steward your wealth through your estate plan, while seeking to minimize the tax burden and working to preserve wealth for successive generations.
TCJA expiration for businesses and employers
While there are several provisions for businesses under the TCJA, the expiration of Section 199A is likely going to have the biggest impact. In short, the 199A deduction permits small business owners – individual owners of sole proprietorships, rental properties, S corporations, or partnerships – to deduct up to 20% of the qualified business income earned by the business. The TCJA implemented significant tax cuts to corporations. With small businesses in mind, Section 199A offered tax savings to individual business owners that were not able to take advantage of other corporate tax cuts. Section 199A allows a deduction for certain qualified business income (“QBI”) defined under the TCJA.
QBI is subject to limitations, depending on the business owner’s taxable income which may include the type of trade or business, the amount of W-2 wages paid by the qualified trade or business, and the unadjusted basis immediately after acquisition (UBIA) of qualified property held by the trade or business.
It also generally excludes specified service trade or businesses (SSTBs), such as those in specific industries like “law, accounting, financial services, and several other enumerated fields, or where the business’s principal asset is the reputation or skill of one or more owners or employees.”
Other expiring provisions include:
- Employer credit for paid family and medical leave: Employers paying wages to employees on family and medical leave may be eligible for a tax credit. This credit incentivizes employers to provide paid family and medical leave to its employees. The credit amount is calculated as a percentage of wages paid to a qualifying employee while on family and medical leave. In order to claim the credit, employers must have a written paid family and medical leave policy. If the employers pay 50% of wages normally paid while an employee is on family and medical leave, the credit is 12.5% of wages paid, proportionally increasing to a maximum credit of 25% for paid leave worth 100% of wages normally paid. Employers may claim the credit for up to 12 weeks of paid leave per employee.
- Qualified opportunity zones: TCJA created the opportunity zone tax incentive to promote economic development in distressed areas. The incentive provides tax benefits to investors who invest in economically distressed areas. Among the various tax benefits, investors in opportunity zones may defer capital gains taxation if gains are reinvested in a qualified opportunity fund. No election for deferral of gain is allowed after December 31, 2026.
If your business has benefitted from these provisions and is relying on these deductions, you need to be mindful of their respective expiration dates starting in 2025. Discuss any concerns with your financial, accounting and possibly legal advisors.
Questions about TCJA Expirations
Tax law is generally complex. The TCJA offered many benefits to individuals, families and businesses. As these provisions seemingly come to an end, be sure to connect with your estate, business, or tax attorney to ensure you understand the impact and see what legal strategies may be employed to mitigate the TCJA expirations.
This blog was co-authored by Alexandra M. Rozzi and Peter E. Iorio.
