On July 1, 2025, the Senate narrowly passed the “One Big Beautiful Bill” (OBBB), sending it back to the House for reconciliation. If the House approves it without changes, the legislation will be sent directly to the President for signature. However, any amendments will require another Senate vote.
Notable Changes in the Senate Version:
- SALT Deduction Cap: Temporarily raised to $40,000, indexed 1% annually through 2029, then reverting to $10,000 in 2030 (unlike the House’s permanent $40,000 cap). Eligibility for the full deduction phases out starting at $500,000 of adjusted gross income (AGI), with the threshold indexed annually at 1%.
- PTET Deductions: Removes prior limits, such as the House’s service-based SALT carve-out and its own 50% PTET reduction cap, preserving deductibility of state and local taxes paid through state-enacted pass-through entity taxes.
- Debt Ceiling Increase: Raises the federal debt ceiling by $5 trillion, compared to the House’s proposed $4 trillion—a historic increase.
- Green Energy Tax Credits: Accelerates the phase-out of tax credits for renewable energy projects placed in service after 2025.
We will continue to monitor the situation and provide updates as changes occur.
For personalized guidance on how the One Big Beautiful Bill may affect your tax, estate, and business planning, please reach out to your Grassi advisor or contact Jeff Cohen, Partner and Tax Practice Leader, TJ Beary, Partner, SALT Practice, and Tax Controversy Practice Leader, or Lisa Rispoli, Partner and Trust and Estate Services Leader today.
