Did the Big Beautiful Bill Pass? Taxes, Medicaid, SNAP Changes

Yes. The One Big Beautiful Bill passed both chambers of Congress and became law on July 4, 2025, when President Trump signed H.R. 1 as Public Law 119-21.¹ The final House vote on the Senate-amended version was 218–214, with two Republicans voting no and no Democrats voting yes in either chamber.² The Senate had cleared its version 51–50 on July 1. The Congressional Budget Office estimates the law will add roughly $3.4 trillion to the deficit over 2025–2034.³

The law is enacted, but almost nothing in it takes effect all at once. Below is what’s now law, grouped by the areas most likely to affect you, with the dates that matter.

What Changed for Your Taxes

The tax portion is the piece most people will feel first. It makes the 2017 Tax Cuts and Jobs Act provisions permanent instead of letting them expire. The standard deduction rises to $15,750 for single filers and $31,500 for married couples filing jointly. The child tax credit goes from $2,000 to $2,200 per child, though the law did not change the credit’s refundability rules, so roughly 17 million children in low-income families still cannot claim the full amount.

Four brand-new deductions were created, all temporary and all set to expire after 2028.

No Tax on Tips

Workers in occupations that customarily receive tips can deduct up to $25,000 of qualified tip income per year. The deduction phases out for individuals earning more than $150,000 ($300,000 for joint filers) and only covers tips reported on a W-2 or 1099 in jobs the IRS recognized as tip-receiving occupations before December 31, 2024.⁴

No Tax on Overtime

Employees can deduct the premium portion of overtime pay required under the Fair Labor Standards Act, meaning the “half” in time-and-a-half. The cap is $12,500 per year, or $25,000 for joint filers, with the same $150,000/$300,000 phase-out thresholds as the tip deduction.⁴

Senior Deduction

Taxpayers 65 and older get an additional $6,000 deduction on top of the existing senior standard deduction. Couples where both spouses qualify can claim $12,000. Phase-outs start at $75,000 for individuals and $150,000 for joint filers.⁴

Car Loan Interest Deduction

Buyers of new vehicles assembled in the United States can deduct up to $10,000 per year in auto loan interest. The car must be for personal use, must be the buyer’s first use of it (no used cars), and the loan must have originated after December 31, 2024. Lease payments don’t count. The deduction phases out above $100,000 in income ($200,000 for joint filers), and you’ll need to include the vehicle identification number on your return.⁴

SALT Cap

The state and local tax deduction cap, stuck at $10,000 since 2017, jumps to $40,000 starting in 2025. For married couples filing separately, the per-person cap is $20,000. The cap then rises by 1% annually through 2029. Higher earners don’t get the full benefit: it phases down at a 30% rate for taxpayers earning above $500,000 and eventually returns to the $10,000 floor at the top.

Medicaid Work Requirements

This is the change most likely to cost people coverage. Starting no later than January 1, 2027, adults who gained Medicaid through the Affordable Care Act’s expansion must complete 80 hours per month of work, community service, or other qualifying activities to keep their coverage.⁵ States can implement earlier, and the Secretary of Health and Human Services must issue an interim final rule by June 1, 2026.

Exemptions cover parents and caretakers with children age 13 and under, pregnant and postpartum individuals, and people classified as “medically frail,” which includes those with disabilities, substance use disorders, disabling mental health conditions, and serious medical conditions.⁵

Verification is where most people are likely to run into trouble. States must check work or exemption status at application and again every six months at renewal. If a state can’t verify compliance, it issues a noncompliance notice, and the person has 30 days to prove they meet the requirement or qualify for an exemption. Miss that window and coverage is terminated no later than the end of the following month.⁵

The CBO estimated that an earlier House version would drop 5.2 million adults from Medicaid by 2034. Because the enacted law cuts Medicaid spending more deeply than that version, the actual coverage loss is expected to exceed 10 million.⁶

SNAP and Food Assistance

Food assistance tightened in two significant ways. Most adults now receive SNAP for only three months within any 36-month period unless they work at least 20 hours per week or participate in an approved work program. Exemptions apply to people under 18 or over 65, individuals with disabilities, caregivers of children under 14, and pregnant individuals.

Most households must now document actual utility expenses instead of using a standard utility allowance when their benefits are calculated. Households with an elderly or disabled member can continue using the standard allowance. SNAP eligibility as of July 4, 2025, is also restricted to U.S. citizens, nationals, lawful permanent residents, Cuban and Haitian entrants, and Compact of Free Association migrants.

Immigration and Border Funding

The law puts $46.5 billion into border wall construction and related infrastructure such as access roads, cameras, and sensors.⁷ It funds additional staffing for Immigration and Customs Enforcement, expanded migrant screening and background checks, and new immigration judges. It also strengthens the 287(g) program, which lets local law enforcement assist with federal immigration enforcement under federal supervision.

A provision called the BIDEN Reimbursement Fund lets states recover costs from January 20, 2021, through September 30, 2028, tied to investigating, locating, or temporarily detaining people in the country illegally, along with prosecution costs for crimes committed by undocumented individuals, including drug and human trafficking.⁷ State and local governments must comply with federal immigration laws to receive any additional funding under the package.

Energy: Fossil Fuel Expansion, Clean Energy Wind-Down

Federal energy policy shifts sharply toward fossil fuel production. Offshore royalty rates drop to between 12.5% and 16.67%, with at least two lease sales per year mandated in the Gulf of America through 2039 and a minimum of six lease sales in Alaska’s Cook Inlet from 2026 through 2032.⁸ Onshore royalties also return to 12.5%, reversing the higher rate set by the Inflation Reduction Act. Coal royalties fall from 12.5% to 7%, and the law mandates leasing 4 million acres of public land with known coal reserves.

Many Inflation Reduction Act clean energy credits are phased out or repealed. Wind and solar projects under Sections 45Y and 48E must begin construction by the end of 2025 to receive the full credit; projects starting in 2026 get 60%, dropping to 20% in 2027 and zero after that. Clean vehicle incentives, clean hydrogen credits, and building efficiency credits face quick repeals. The residential clean energy credit under Section 25D also loses its leasing option.⁹

Trump Accounts for Children

The law creates a new savings vehicle called a Trump Account. The federal government makes a one-time $1,000 contribution for each eligible child, and individuals or employers can add up to $5,000 per year. Employer contributions up to $2,500 per year are excluded from the employee’s taxable income. Money must be invested in mutual funds or ETFs tracking a U.S. stock index like the S&P 500, and withdrawals are generally restricted until the child turns 18. Accounts cannot be funded before July 4, 2026.¹⁰

Defense and the Debt Ceiling

The law includes $150 billion in mandatory defense funding for military modernization, servicemember quality of life, and the defense industrial base.¹¹ It also raises the federal debt ceiling by $5 trillion, bringing it to roughly $41.1 trillion.

Dates to Watch

The implementation calendar matters as much as the text of the law:

End of 2025: deadline for wind and solar projects to begin construction to lock in the full clean energy credit.
June 1, 2026: HHS interim final rule on Medicaid work requirements is due.
July 4, 2026: Trump Accounts can start being funded.
January 1, 2027 at the latest: Medicaid work requirements take effect nationally.
End of 2028: the tips, overtime, senior, and car loan interest deductions all expire unless Congress extends them.

If any of these provisions applies to you, the version of the rules you plan around is the one in effect on the date you act, not the headline from July 2025.

1
Congress.gov. H.R.1 – 119th Congress (2025-2026)
2
Office of the Clerk, U.S. House of Representatives. Roll Call 190 – Bill Number H.R. 1
3
Congressional Budget Office. Estimated Budgetary Effects of Public Law 119-21
4
Internal Revenue Service. One, Big, Beautiful Bill Act – Tax Deductions for Working Americans and Seniors
5
KFF. A Closer Look at the Work Requirement Provisions in the 2025 Federal Budget Reconciliation Law
6
KFF. Allocating CBO’s Estimates of Federal Medicaid Spending Reductions Across the States – Enacted Reconciliation Package
7
U.S. Senate Committee on the Judiciary. The One Big Beautiful Bill Makes America Safe Again
8
U.S. Department of the Interior. Interior Department Advances Energy Dominance Through the One Big Beautiful Bill Act
9
Novogradac. Senate Finance Committee Reconciliation Bill Proposes Modest Changes to House Repeal of IRA Energy Tax Incentives
10
Internal Revenue Service. One, Big, Beautiful Bill Provisions
11
U.S. House Armed Services Committee. One Big, Beautiful Bill – House Armed Services Committee