Ref: OBBBA signed by President Trump 7/4/2025
States: California does NOT conform to any of these changes. Some states such as Utah and New Mexico have “rolling conformity” and will likely adopt many of these changes. Non-California clients should check their individual state adoption.
Business selected highlights (not all sections of the OBBBA):
- QBI 20% deduction: Enjoyed by most small businesses since 2017 has been made permanent.
- Bonus Depreciation: Restores to 100% for property placed in service on or after 1/19/25. This is now permanent.
- Research & Development: Allows businesses to IMMEDIATELY EXPENSE R&D again. You no longer have to capitalize and amortize these costs. ALSO businesses that have been capitalizing the costs from 2022 through 2024 can elect to accelerate the remaining balance in the capitalized accounts over a one or two year period. (We’ll await regulations on how to accomplish this).
- 1099-MISC and 1099-NEC: Starting for payments made in 2026, reporting threshold moves from $600 to $2,000.
- Form 1099-K: Threshold for reporting by third-party services (e.g. Paypal) moves to $20,000 on more than 200 separate transactions.
- Termination of clean energy credits: Terminates for vehicles purchased after September 30, 2025.
