Signed by President Donald Trump

Vote Smart's Synopsis:

A vote to adopt a conference report that amends the Internal Revenue Code to reduce certain tax rates and modify policies, credits, and deductions for individuals and businesses.

Highlights:

• Repeals the tax penalty under the Affordable Care Act for failing to have health insurance beginning in 2019 (Sec. 11081).

• Amends the structure of the individual income tax so that the 7 brackets have rates of 10%, 12%, 22%, 24%, 32%, 35%, and 37%, effective until December 31, 2025 (Sec. 11001).

• Increases the standard deduction to $24,000 for married individuals filing jointly, $18,000 for heads of household, and $12,000 for all other individuals, effective until December 31, 2025 (Sec. 11021).

• Establishes a $10,000 limit on the state and local tax deduction (SALT), which applies to individuals or married couples filing jointly, and authorizes any state or local property, income, or sales taxes to count toward the deduction (Sec. 11042).

• Specifies that the SALT limit for married individuals filing a separate tax return is $5,000 (Sec. 11042).

• Increases the Alternative Minimum Tax exemption levels to $70,300 for singles and $109,400 for married couples (Sec. 12003).

• Increases the annual exemption for estate, gift and generation-skipping taxes from the $5 million base to a new $10 million base, effective for tax years 2018 through 2025 (Sec. 11061).

• Increases the child tax credit to $2,000 per child, $1,400 of which will be fully refundable (Sec. 11022).

• Authorizes a $500 non-refundable credit for each non-child dependent or child without a valid Social Security number, effective December 31, 2017 (Sec. 11022).

• Specifies that the deduction for personal exemptions will be suspended from December 31, 2017 to December 31, 2025 (Sec. 11041).

• Authorizes a deduction for medical expenses exceeding 7.5% of an individual’s adjusted gross income, effective only until January 1, 2019 (Sec. 11027).

• Specifies that the deduction for charitable giving remains in effect (Sec. 11023).

• Authorizes graduate students to continue exempting tuition waivers from their tax liability (Sec. 11041).

• Specifies that student loans and private education loans remain tax exempt (Sec. 11031).

• Authorizes 529 account funding for elementary and secondary tuition at a public, private, or religious school, but prohibits any cash distribution from exceeding $10,000 (Sec. 11032).

• Decreases the mortgage interest deduction for existing mortgages to $750,000 (Sec. 11043).

• Repeals deductions for interest on loans for second homes or home equity loans, with the exception of those that are used to finance home improvements (Sec. 11043).

• Repeals the deduction for moving expenses unless the individual in question is an active member of the Armed Forces and is moving because of a military order (Sec. 11050).

• Establishes a tax credit for paid family and medical leave, set to expire in December of 2019 (Sec. 13403). 

• Specifies that for any divorce or separation agreement executed or modified after December 31, 2018, alimony payments to an ex-spouse will no longer be deductible by the payor and will no longer be included as part of the recipient’s gross income (Sec. 11051).

• Authorizes the Secretary of the Treasury to determine the amount of tax required to be withheld by employers from a taxpayer’s wages until January 1, 2019 (Sec. 11041).

• Reduces the corporate tax rate from 35% to 21%, beginning in 2018 (Sec. 13001).

• Repeals the corporate Alternative Minimum Tax (AMT) (Sec. 12001).

• Authorizes a 20% deduction for non-wage income of qualified pass-through entities including S corporations, LLCs, partnerships and sole proprietorships beginning in 2018. (Sec. 11011).

• Establishes a territorial tax system in which each subsidiary of a corporation that is located outside of the United States pays the tax rate of the country in which it is legally established (Sec. 14222).

• Specifies that 100% of the foreign-source portion of dividends paid by a foreign corporation to a U.S. corporate shareholder that owns 10% or more of the foreign corporation is exempt from U.S. taxation (Sec. 14101).

• Establishes a 1.4% excise tax on investment income of private colleges and universities with assets valued at $500,000 per student, applicable only to institutions with at least 500 students (Sec. 13701).

• Reduces the federal excise tax imposed on domestic brewers from $7 per barrel to $3.50 per barrel, which applies only to brewers that make no more than 2 million barrels annually (Sec. 13802).  

• Authorizes arctic drilling on certain parts of the non-wilderness coastal plain of Alaska’s Arctic National Wildlife Refuge (Sec. 13821).

• Increases revenue from offshore energy production for the Gulf Coast for the fiscal years 2020 and 2021 (Sec. 20002).

• Specifies that Puerto Rico is considered a foreign jurisdiction for tax purposes (Sec. 11011).

Full Bill Text

Vote Smart's Synopsis:

A vote to adopt a conference report that amends the Internal Revenue Code to reduce certain tax rates and modify policies, credits, and deductions for individuals and businesses.

Highlights:

• Repeals the tax penalty under the Affordable Care Act for failing to have health insurance beginning in 2019 (Sec. 11081).

• Amends the structure of the individual income tax so that the 7 brackets have rates of 10%, 12%, 22%, 24%, 32%, 35%, and 37%, effective until December 31, 2025 (Sec. 11001).

• Increases the standard deduction to $24,000 for married individuals filing jointly, $18,000 for heads of household, and $12,000 for all other individuals, effective until December 31, 2025 (Sec. 11021).

• Establishes a $10,000 limit on the state and local tax deduction (SALT), which applies to individuals or married couples filing jointly, and authorizes any state or local property, income, or sales taxes to count toward the deduction (Sec. 11042).

• Specifies that the SALT limit for married individuals filing a separate tax return is $5,000 (Sec. 11042).

• Increases the Alternative Minimum Tax exemption levels to $70,300 for singles and $109,400 for married couples (Sec. 12003).

• Increases the annual exemption for estate, gift and generation-skipping taxes from the $5 million base to a new $10 million base, effective for tax years 2018 through 2025 (Sec. 11061).

• Increases the child tax credit to $2,000 per child, $1,400 of which will be fully refundable (Sec. 11022).

• Authorizes a $500 non-refundable credit for each non-child dependent or child without a valid Social Security number, effective December 31, 2017 (Sec. 11022).

• Specifies that the deduction for personal exemptions will be suspended from December 31, 2017 to December 31, 2025 (Sec. 11041).

• Authorizes a deduction for medical expenses exceeding 7.5% of an individual’s adjusted gross income, effective only until January 1, 2019 (Sec. 11027).

• Specifies that the deduction for charitable giving remains in effect (Sec. 11023).

• Authorizes graduate students to continue exempting tuition waivers from their tax liability (Sec. 11041).

• Specifies that student loans and private education loans remain tax exempt (Sec. 11031).

• Authorizes 529 account funding for elementary and secondary tuition at a public, private, or religious school, but prohibits any cash distribution from exceeding $10,000 (Sec. 11032).

• Decreases the mortgage interest deduction for existing mortgages to $750,000 (Sec. 11043).

• Repeals deductions for interest on loans for second homes or home equity loans, with the exception of those that are used to finance home improvements (Sec. 11043).

• Repeals the deduction for moving expenses unless the individual in question is an active member of the Armed Forces and is moving because of a military order (Sec. 11050).

• Establishes a tax credit for paid family and medical leave, set to expire in December of 2019 (Sec. 13403). 

• Specifies that for any divorce or separation agreement executed or modified after December 31, 2018, alimony payments to an ex-spouse will no longer be deductible by the payor and will no longer be included as part of the recipient’s gross income (Sec. 11051).

• Authorizes the Secretary of the Treasury to determine the amount of tax required to be withheld by employers from a taxpayer’s wages until January 1, 2019 (Sec. 11041).

• Reduces the corporate tax rate from 35% to 21%, beginning in 2018 (Sec. 13001).

• Repeals the corporate Alternative Minimum Tax (AMT) (Sec. 12001).

• Authorizes a 20% deduction for non-wage income of qualified pass-through entities including S corporations, LLCs, partnerships and sole proprietorships beginning in 2018. (Sec. 11011).

• Establishes a territorial tax system in which each subsidiary of a corporation that is located outside of the United States pays the tax rate of the country in which it is legally established (Sec. 14222).

• Specifies that 100% of the foreign-source portion of dividends paid by a foreign corporation to a U.S. corporate shareholder that owns 10% or more of the foreign corporation is exempt from U.S. taxation (Sec. 14101).

• Establishes a 1.4% excise tax on investment income of private colleges and universities with assets valued at $500,000 per student, applicable only to institutions with at least 500 students (Sec. 13701).

• Reduces the federal excise tax imposed on domestic brewers from $7 per barrel to $3.50 per barrel, which applies only to brewers that make no more than 2 million barrels annually (Sec. 13802).  

• Authorizes arctic drilling on certain parts of the non-wilderness coastal plain of Alaska’s Arctic National Wildlife Refuge (Sec. 13821).

• Increases revenue from offshore energy production for the Gulf Coast for the fiscal years 2020 and 2021 (Sec. 20002).

• Specifies that Puerto Rico is considered a foreign jurisdiction for tax purposes (Sec. 11011).

Full Bill Text

Vote Smart's Synopsis:

A vote to adopt a conference report that amends the Internal Revenue Code to reduce certain tax rates and modify policies, credits, and deductions for individuals and businesses.

Highlights:

• Repeals the tax penalty under the Affordable Care Act for failing to have health insurance beginning in 2019 (Sec. 11081).

• Amends the structure of the individual income tax so that the 7 brackets have rates of 10%, 12%, 22%, 24%, 32%, 35%, and 37%, effective until December 31, 2025 (Sec. 11001).

• Increases the standard deduction to $24,000 for married individuals filing jointly, $18,000 for heads of household, and $12,000 for all other individuals, effective until December 31, 2025 (Sec. 11021).

• Establishes a $10,000 limit on the state and local tax deduction (SALT), which applies to individuals or married couples filing jointly, and authorizes any state or local property, income, or sales taxes to count toward the deduction (Sec. 11042).

• Specifies that the SALT limit for married individuals filing a separate tax return is $5,000 (Sec. 11042).

• Increases the Alternative Minimum Tax exemption levels to $70,300 for singles and $109,400 for married couples (Sec. 12003).

• Increases the annual exemption for estate, gift and generation-skipping taxes from the $5 million base to a new $10 million base, effective for tax years 2018 through 2025 (Sec. 11061).

• Increases the child tax credit to $2,000 per child, $1,400 of which will be fully refundable (Sec. 11022).

• Authorizes a $500 non-refundable credit for each non-child dependent or child without a valid Social Security number, effective December 31, 2017 (Sec. 11022).

• Specifies that the deduction for personal exemptions will be suspended from December 31, 2017 to December 31, 2025 (Sec. 11041).

• Authorizes a deduction for medical expenses exceeding 7.5% of an individual’s adjusted gross income, effective only until January 1, 2019 (Sec. 11027).

• Specifies that the deduction for charitable giving remains in effect (Sec. 11023).

• Authorizes graduate students to continue exempting tuition waivers from their tax liability (Sec. 11041).

• Specifies that student loans and private education loans remain tax exempt (Sec. 11031).

• Authorizes 529 account funding for elementary and secondary tuition at a public, private, or religious school, but prohibits any cash distribution from exceeding $10,000 (Sec. 11032).

• Decreases the mortgage interest deduction for existing mortgages to $750,000 (Sec. 11043).

• Repeals deductions for interest on loans for second homes or home equity loans, with the exception of those that are used to finance home improvements (Sec. 11043).

• Repeals the deduction for moving expenses unless the individual in question is an active member of the Armed Forces and is moving because of a military order (Sec. 11050).

• Establishes a tax credit for paid family and medical leave, set to expire in December of 2019 (Sec. 13403). 

• Specifies that for any divorce or separation agreement executed or modified after December 31, 2018, alimony payments to an ex-spouse will no longer be deductible by the payor and will no longer be included as part of the recipient’s gross income (Sec. 11051).

• Authorizes the Secretary of the Treasury to determine the amount of tax required to be withheld by employers from a taxpayer’s wages until January 1, 2019 (Sec. 11041).

• Reduces the corporate tax rate from 35% to 21%, beginning in 2018 (Sec. 13001).

• Repeals the corporate Alternative Minimum Tax (AMT) (Sec. 12001).

• Authorizes a 20% deduction for non-wage income of qualified pass-through entities including S corporations, LLCs, partnerships and sole proprietorships beginning in 2018. (Sec. 11011).

• Establishes a territorial tax system in which each subsidiary of a corporation that is located outside of the United States pays the tax rate of the country in which it is legally established (Sec. 14222).

• Specifies that 100% of the foreign-source portion of dividends paid by a foreign corporation to a U.S. corporate shareholder that owns 10% or more of the foreign corporation is exempt from U.S. taxation (Sec. 14101).

• Establishes a 1.4% excise tax on investment income of private colleges and universities with assets valued at $500,000 per student, applicable only to institutions with at least 500 students (Sec. 13701).

• Reduces the federal excise tax imposed on domestic brewers from $7 per barrel to $3.50 per barrel, which applies only to brewers that make no more than 2 million barrels annually (Sec. 13802).  

• Authorizes arctic drilling on certain parts of the non-wilderness coastal plain of Alaska’s Arctic National Wildlife Refuge (Sec. 13821).

• Increases revenue from offshore energy production for the Gulf Coast for the fiscal years 2020 and 2021 (Sec. 20002).

• Specifies that Puerto Rico is considered a foreign jurisdiction for tax purposes (Sec. 11011).

Full Bill Text

Vote Smart's Synopsis:

A vote to pass a bill that amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses.

Highlights:

• Repeals the tax fee imposed on individuals or families not covered by the Affordable Care Act (Sec. 11081).

• Specifies a 7-bracket tax system with rates of 10%, 12%, 22%, 24%, 32%, 35% and 38.5% (Sec. 11001).

• Establishes a standard deduction of $12,000 for individuals and $18,000 for heads of household (Sec. 11021).

• Establishes a flat corporate tax rate of 20%, effective in 2019 (Sec. 13001).

• Repeals the personal exemption (Sec. 11041).

• Increases the child tax credit from $1,000 to $2,000 per child (Sec. 11022).

• Repeals deductions for state and local taxes (SALT) (Sec. 11042).

• Repeals the ability for a new government bond, including a municipal bond, to receive one advance refund during its lifetime, effective in 2018 (Sec. 13532).

• Specifies that the deduction for medical expenses exceeding 7.5%, rather than 10%, of an individual’s adjusted gross income remains in effect (Sec. 11028).

• Establishes a 1.4% excise tax on investment income for private colleges and universities with endowments worth at least $500,000 per student (Sec. 13701).

• Specifies that the Alternative Minimum Tax remains in effect but has a higher exemption amount (Sec. 12001).

• Specifies that the following education-related deductions and credits remain in effect (Secs. 11031, 11033, 13613 and 13701):  

• Student loan interest deductions;

• Qualified tuition reductions for campus employees and graduate students;

• Employer-provided education assistance; and

• Tax-exempt private activity bonds for private colleges and universities.

• Authorizes a deduction of up to $500 for teachers who spend their own money on classroom supplies (Sec. 11032).

• Authorizes parents to use a special tax-free college savings account to pay tuition for private K-12 schools, with an annual spending limit of $10,000 (Sec. 11033).

• Repeals the tax deductions for interest paid on home-equity loans (Sec. 11043).

• Specifies that in the case of an individual, personal casualty losses are deductible only to the extent that they are attributable to a federally declared disaster (Sec. 11044).  

• Specifies that the deduction for charitable giving remains in effect (Sec. 11023).

• Authorizes oil drilling in the Arctic National Wildlife Refuge (ANWR) (Sec. 20001).

• Specifies that 100% of the foreign-source portion of dividends paid by a foreign corporation to a U.S. corporate shareholder that owns 10% or more of the foreign corporation is exempt from U.S. taxation (Sec. 14101).

• Increases the the estate and gift tax exemption to $10 million (Sec. 11061).

• Specifies that settlement fees from non disclosure agreements paid in connection with sexual harassment or sexual abuse are non-deductible (Sec. 13307).

Full Bill Text

Vote Smart's Synopsis:

A vote to pass a bill that amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses.

Highlights:

• Amends the tax system by consolidating the current 7 brackets into 4 with rates of 12%, 25%, 35%, and 39.6% (Sec. 1001).
  
  

• Increases the standard deduction to $12,200 for individuals, $18,300 for heads of household, and $24,400 for married couples (Sec. 1101).

• Reduces the corporate tax rate from a maximum of 35% to a flat 20%, with the exception of personal services corporations, which will have a flat 25% rate, effective in 2018 (Sec. 3001).

• Repeals the student loan interest rate deduction (Secs. 1203-1204).

• Repeals the personal exemption (Sec. 1104).

• Establishes a child tax credit of $1,600 per child (Sec. 1101).

• Repeals the deduction for state and local income and sales taxes not paid or accrued in a trade or business, with the exception of property taxes of up to $10,000 (Sec. 1303).  

• Specifies that the tax exemption for municipal bond interest remains the same, with the exception of those used for professional sports stadiums, which will no longer be tax exempt (Secs. 3602-3604).

• Specifies that interest earned on newly issued private activity bonds (PABs) will be included as income and thus subject to a tax (Sec. 3601).

• Specifies that wind and energy tax credits are reduced from 2.3 cents per kilowatt hour to 1.5 cents per kilowatt hour (Sec. 3501).

• Repeals the deduction for medical expenses that exceed 10% of an individual's adjusted gross income (Sec. 1308).

• Authorizes political endorsements by 501(c)(3) organizations, provided that the expenses of such activities are of an insignificant amount (Sec. 5201).

• Repeals tax credits that small employers can receive for the following (Secs. 3210, 3211, and 3222):

• Employee health insurance expenses;

• Pension plan startup costs; and

• Employer-provided child care.

• Limits private institutions’ use of tax-exempt bond financing by repealing the tax exemption for interest on new private activity bonds (Sec. 3431).

• Establishes a 1.4% excise tax on investment income for private colleges and universities with endowments worth at least $250,000 per student (Sec. 5103).

• Repeals the tax benefit for non-traditional students taking longer than 4 years to complete their degrees, part-time students, graduate students and lifetime learners (Sec. 1201).

• Repeals the Alternative Minimum Tax (AMT), the federal tax system designed to prevent wealthy taxpayers from using loopholes to avoid paying taxes (Sec. 2001).

• Repeals the following education-related deductions and credits (Secs. 1201, 1204, 1205, and 1208):

• Lifetime Learning Credit and the Hope Scholarship Credit;;

• Student loan interest deduction;

• Section 117(d) tuition reduction assistance; and

• Section 127 employer-provided educational assistance.

• Authorizes a tax subsidy for the construction of low-income housing while repealing the tax-free status of certain bonds that help builders arrange financing for such projects (Secs. 3204 and 3431).

• Repeals the first-time homebuyer credit and tax deductions for interest paid on home-equity loans (Secs. 1310 and 3432).  

• Specifies that the following itemized deductions remain in effect (Secs. 1402, 1403, and 1405):

• The mortgage interest deduction with a cap of $500,000 in loans for newly purchased homes;

• Charitable contribution deductions; and

• Deductions for property taxes, which would be capped at $10,000 per tax filer.

• Repeals the tax credit for energy efficient homes acquired after December 31, 2013, as well as the credit for electricity produced from renewable resources (Secs. 3217 and 3206).

• Specifies that 100% of the foreign-source portion of dividends paid by a foreign corporation to a U.S. corporate shareholder that owns 10% or more of the foreign corporation is exempt from U.S. taxation (Sec. 4001).

• Repeals the Alternative Minimum Tax (AMT), the federal tax system designed to prevent wealthy taxpayers from using loopholes to avoid paying taxes (Sec. 2001).

• Repeals the Work Opportunity Tax Credit (WOTC), the federal tax credit for employers who hire and retain veterans and other individuals with significant barriers to employment (Sec. 3229).

• Repeals the estate and generation-skipping transfer taxes (Sec. 1602).

• Authorizes an embryo or a fetus at any stage in development to be named as a beneficiary to a 529 college savings account (Sec. 1202).

Full Bill Text

Full Bill Text