Vice President JD Vance is scheduled to promote the One Big Beautiful Bill Act at Don’s Machine Shop in West Pittston on Wednesday afternoon.
The legislation prevents the expiration of the tax provisions of the 2017 Tax Cuts and Jobs Act, thus protecting taxpayers from an average tax hike of $2,521 on the average household in Pennsylvania.
Below is a list of how key tax provisions of the One Big Beautiful Bill Act signed into law by President Trump will benefit taxpayers in Pennsylvania.
ACCORDING TO OFFICIAL IRS DATA:
5,793,440 Households in PA (93 percent of PA Taxpayers) Will See Their Doubled Standard Deduction Protected and Permanently Increased by $1,500
The current standard deduction, which was doubled in the 2017 Trump tax cuts and currently claimed by 90 percent of tax filers, is increased and made permanent.
Beginning in 2025, the standard deduction increases by $1,500 for married couples, $1,125 in the case of a head of household, and $750 for individuals.
This means the new standard deduction for 2025 would increase to $31,500 for married couples, $23,625 for a head of household, and $15,750 for a single filer. These amounts are adjusted for inflation thereafter.
1,400,580 PA Families Benefit from a Per Child Tax Credit Boosted to $2,200, Permanently Extended
The bill makes permanent the doubled child tax credit of $2,000 per child that would be slashed in half if the Trump tax cuts were allowed to expire at the end of this year. The bill further increases the child tax credit to $2,200 per child beginning in 2025.
It also makes permanent the increased income phase-out threshold amounts of $200,000 ($400,000 in the case of a joint return), as well as the $500 nonrefundable credit for each dependent of the taxpayer other than a qualifying child.
962,500 Small Businesses (99.6 percent of all businesses in PA) See a Permanent 20 Percent Small Business Deduction
The Deduction for Qualified Business Income (199a) for small businesses (partnership, S corporation, sole proprietorship, etc.) is permanently extended at 20 percent. Further tax relief is provided by a loosening of the phase in of limitations by increasing the $50,000 (non-joint returns) and $100,000 (joint returns) amounts to $75,000 and $150,000, respectively. This provision also introduces a new, inflation-adjusted, minimum deduction of $400 for taxpayers who have at least $1,000 of QBI from one or more active trades or businesses in which the taxpayer materially participates. This ensures small business owners with a certain QBI level are entitled to an enhanced baseline deduction.
49,053 Family-Owned Farms Receive Permanent and Expanded Death Tax Relief
Permanently extends the death tax and lifetime gift tax exemption, increases the exemption amount to $15 million for single filers ($30 million for married filing jointly) in 2026 and indexes the exemption amount for inflation thereafter.
199,285 Tipped Workers Will Benefit from No Tax On Tips
Creates a deduction of up to $25,000 for qualified tips received by an individual. This deduction is allowed for both employees receiving a W-2 and independent contractors receiving a 1099-K, 1099-NEC, or reported by the taxpayer on Form 4317. Eligible individuals must be in a job that traditionally and customarily receives tips.
The Pennsylvania Department of Labor and Industry estimated there were 199,285 tipped workers in Pennsylvania, according to the Philadelphia Citizen.
The deduction begins phasing out for individuals with modified adjusted gross income exceeding $150,000 ($300,000 in the case of a joint return). Individuals are required to have a work-eligible SSN to claim. The deduction is allowed through 2028.
