Introduction to the One Big Beautiful Bill Act (OBBBA)
On July 4, 2025, the President signed into law the One Big Beautiful Bill Act (OBBBA) — a sweeping piece of legislation that reshapes the U.S. tax landscape for businesses, families, estates, and investors.
The law makes permanent changes to several provisions that were set to expire in 2026, while also introducing new incentives, tightening or eliminating others, and clarifying rules across industries. The goal of the legislation was framed around simplification, U.S.-centric investment incentives, and family support measures.
For our clients, the OBBBA means:
More clarity and stability in estate and business planning (no 2026 “sunset” surprise).
Enhanced opportunities for small business owners and entrepreneurs through permanent bonus depreciation, expanded expensing, and renewed R&D deductions.
Greater support for families through childcare, adoption, and dependent care credits.
Reshaped energy incentives that favor domestic production and reduce reliance on foreign supply chains.
New compliance and reporting requirements for individuals, nonprofits, and universities.
At InSight, we’ve prepared a consolidated roadmap of the OBBBA to highlight the changes most relevant to our clients — focusing not only on what the law says, but what it means for your planning, your wealth, and your future.
Business Section
| Low-Income Housing Tax Credit (LIHTC) | Bond financing threshold lowered (50% → 25%); state credit ceiling permanently increased by 12%. | More affordable housing projects can qualify; a broader pipeline for investors in housing credits. |
| Carbon Oxide Sequestration Credit (§45Q) | Foreign entities restricted; transfer to foreign disallowed; credit parity at $17/ton. | Carbon capture incentives narrowed; domestic players gain edge. |
| Zero-Emission Nuclear Power Credit | Eliminated for foreign-linked facilities (2025/2027 phase-outs). | Nuclear incentives more U.S.-centric; potential impact on large utility investors. |
| Advanced Manufacturing Production Credit | Credit phased out later (2033); exemptions for wind components & metallurgical coal. | Incentives extended, but more selective; impacts supply chain planning. |
| Clean Electricity Production Credit (§45Y) | Wind/solar credits limited post-2027; no credits for China/prohibited foreign entity materials. | Material sourcing matters; investors must ensure U.S./allied supply chains. |
| Clean Electricity Investment Credit (§48E) | Similar restrictions; stricter domestic content rules (ramping to 55% after 2026). | Infrastructure investors must validate domestic sourcing to keep credit. |
| Advanced Manufacturing Investment Credit (Chips/semiconductors) | Increased to 35% (from 25%). | More incentive for U.S. semiconductor buildouts; boosts long-term tech supply chain. |
| Asset Expensing (Section 179) | Expensing limit raised to $2.5M, phase-out at $4M. | Larger purchases can be expensed immediately; benefit for small/mid-size firms. |
| Small Business Stock (QSBS) | Post-2025 acquisitions: 50% exclusion (3 yr hold), 75% (4 yr), 100% (5 yr); cap raised to $15M, inflation indexed. | Stronger incentive for early-stage investing but more holding complexity. |
| Bonus Depreciation | 100% permanent reinstatement. | Big win for capital-intensive businesses. |
| R&D Expensing | Immediate domestic expensing reinstated. | Reverses 2022 amortization change; cash flow relief for innovators. |
| REIT Subsidiary Asset Limit | Raised from 20% → 25%. | More flexibility for REIT investors. |
| Alternative Fuel Credits (EV charging, hydrogen, commercial EVs) | Terminated. | Green vehicle investments less subsidized; revisit fleet plans. |
| Clean Hydrogen Production Credit (§45V) | Terminated after 2027. | Hydrogen project economics will need reassessment. |
Individuals Section
| Child & Dependent Care Credit | Credit rate boosted to 50% (min 35%); higher phaseout thresholds. | Families see stronger tax relief on childcare. |
| Adoption Credit | Refundable up to $5,000; tribal/state “special needs” designations count. | Greater support for adoptive families. |
| Education Credits (AOTC/LLC) | SSNs & EINs required; IRS can deny if missing. | Clients need stronger compliance tracking for dependents’ education. |
| Employer-Provided Childcare Credit | Credit increased to 40–50%, cap raised to $500–600K. | Greater incentive for companies to expand childcare offerings. |
Estate and Gift
| Estate & Gift Exemption | Permanently $15M/person, indexed for inflation. | Removes 2026 “cliff”; planning can be longer-term, but high-net-worth families still benefit from using exemptions early. |
Compensation, Employee Benefits & Healthcare
| Telehealth Safe Harbor | Permanently extended. | HSAs remain compatible; long-term planning flexibility. |
| Direct Primary Care / HSAs | Direct primary care & bronze plans now HSA compatible. | Expands HSA planning options for families. |
| Excessive Remuneration Rule | Controlled group rules aggregate compensation caps. | Exec comp planning for public companies more restrictive. |
Excise Taxes
| Firearms & Silencers | Excise reduced to $0 (non-machinegun). | Niche industry impact. |
| Puerto Rico & USVI Rum Cover-Over | Permanently increased. | Regional investment benefit. |
| Remittance Transfers | New 1% excise tax. | May affect international families sending money abroad. |
| De Minimis Import Rules | $800 exemption repealed (2027); penalties for abuse. | Small businesses/e-commerce costs to rise. |
International (select highlights)
| Compensation Caps in Exempt Orgs | Expanded definition of “covered employee.” | Nonprofits face broader excise exposure. |
| University Endowment Tax | Excise on investment income increased (tiered 1.4–8%). | Wealthy universities face more tax drag; limited donor/charity impact. |
Exempt Organizations
| Business Interest Limitation (ATI definition) | Excludes Subpart F/GILTI & related deductions. | More favorable treatment for multinationals with foreign income. |
| Depreciation for Qualified Production Property | 100% bonus for production-related facilities (through 2030). | Incentive to onshore manufacturing. |