Sunset Tax Provisions: What’s Permanent, Expiring, and When

A sunset tax provision is a tax rule with an expiration date written into the law itself, ending automatically on a set date unless Congress extends it. After the One Big Beautiful Bill Act was signed on July 4, 2025, most of the individual tax cuts from the 2017 Tax Cuts and Jobs Act that were scheduled to disappear at the end of 2025 became permanent, and a new batch of temporary provisions took their place with expiration dates running from late 2025 through 2029.¹

Why Tax Laws Come With Expiration Dates

Sunsets exist mostly because of Senate budget rules. When Congress passes a tax bill through budget reconciliation, it needs only a simple majority, but the Byrd Rule blocks any provision that would increase the deficit beyond the years covered by the budget resolution.² Adding an expiration date to a tax cut keeps it inside the budget window on paper, so lawmakers use sunsets to fit permanent-feeling tax breaks into a temporary shell. That is why the TCJA’s individual cuts were originally set to expire after 2025, and it is why the One Big Beautiful Bill Act, also passed through reconciliation, contains its own set of temporary provisions.

What Became Permanent in 2025

The biggest source of uncertainty for individual taxpayers is now gone. The core TCJA changes that were on track to expire December 31, 2025, are locked in with no scheduled end date.

Individual Income Tax Rates

The seven-bracket structure and its rate percentages (10%, 12%, 22%, 24%, 32%, 35%, and 37%) are permanent. For tax year 2026, single filers hit the top 37% rate above $640,600, and married-filing-jointly filers hit it above $768,700.³ Bracket thresholds continue to adjust for inflation, but the pre-TCJA rates topping out at 39.6% will not return without new legislation.

Standard Deduction and Personal Exemptions

The nearly doubled standard deduction is permanent and continues to index for inflation. The personal exemption stays at $0. Taxpayers will not go back to claiming roughly $4,050 per person and dependent on top of the standard or itemized deduction.³

Estate and Gift Tax Exemption

The basic exclusion amount is now $15 million per individual, or $30 million for a married couple, indexed for inflation starting in 2027 and with no expiration.⁴⁵ The IRS anti-clawback rule from 2019 still applies to large gifts made under the higher TCJA exemption between 2018 and 2025.⁶

Qualified Business Income Deduction

The Section 199A pass-through deduction is permanent, and the deduction rate rose from 20% to 23% of qualified business income.⁷ Income limitations still apply to specified service businesses such as law, medicine, consulting, and financial services, but the phase-in range for those limits has been widened, giving more service-business owners partial access at higher incomes.

Bonus Depreciation and the Corporate Rate

The 21% corporate income tax rate stays where it has been since 2017. One hundred percent bonus depreciation for qualifying business property has been fully restored and made permanent for property acquired after January 19, 2025. Businesses that placed property in service during the first tax year ending after that date can elect a 40% rate instead if it suits their situation.⁸

Other Locked-In Changes

The mortgage interest deduction stays capped at interest on the first $750,000 of acquisition debt ($375,000 for married filing separately). The Pease limitation on itemized deductions stays repealed. The 60% AGI limit for cash charitable contributions is permanent.

What’s Expiring and When

The One Big Beautiful Bill Act created its own temporary provisions, and several have already ended or will end soon. If you are relying on any of these, the date matters.

Already Gone or Ending in 2025

Several clean energy credits were shut down almost immediately:¹

New, used, and commercial clean vehicle credits are not available for vehicles acquired after September 30, 2025.
The energy efficient home improvement credit is not available for property placed in service after December 31, 2025.
The residential clean energy credit is not available for expenditures after December 31, 2025.

If you were counting on an EV credit or a solar credit for a 2026 purchase, it is gone.

Expiring After 2028

These provisions are available for tax years 2025 through 2028, then end unless Congress extends them:¹

The deduction for tip income.
The deduction for overtime pay.
The deduction for auto loan interest.
The additional standard deduction for taxpayers age 65 and older.
Full expensing for domestic manufacturing structures.
Clean hydrogen production credits.

SALT Cap Through 2029

The state and local tax deduction cap now has an expanded structure with its own sunset. For 2025 the cap is $40,000, rising by 1% per year through 2029; for 2026 it is roughly $40,400. The expanded cap phases down for taxpayers with modified adjusted gross income above $500,000 ($250,000 for married filing separately), losing 30 cents for every dollar of income over that threshold. Once income reaches $600,000 ($300,000 for married filing separately), the cap is back at $10,000. The income threshold also rises 1% a year through 2029.

In 2030, the whole expanded structure disappears and the cap reverts to the original TCJA level of $10,000 ($5,000 for married filing separately) with no income-based phaseout. For high earners in high-tax states, 2030 is a real cliff.

Clean Fuel Credit Through 2029

The clean fuel production credit has been extended, but only for fuel sold before January 1, 2030.¹

What This Means for Your Planning

The permanent side of the law is genuinely usable for long-range planning. Retirement withdrawal strategies, business structures, and estate plans can be built around the current rates, the $15 million estate exemption, and the 23% pass-through deduction without the uncertainty that hung over 2018 through mid-2025. Absent new legislation, none of it is scheduled to change.

The temporary side calls for more caution. If you earn tips or overtime, the new deductions reduce your tax bill in 2025 through 2028, but they are not a reason to restructure your career around income that Congress may not extend. If you are a high earner in a high-tax state, the expanded SALT cap helps through 2029, and the reversion to $10,000 in 2030 is worth building into projections now. If you were planning a home energy upgrade or a clean vehicle purchase around a federal credit, most of those windows have already closed.

The pattern is worth naming. Congress uses sunsets to pass tax cuts that would not survive budget rules as permanent measures, then faces pressure to extend them before they expire. Sometimes the extension arrives, as with the TCJA individual cuts. Sometimes it does not, as with the clean energy credits. Assuming every expiring provision will be renewed is a bet that has not always paid off.

1
Internal Revenue Service. One, Big, Beautiful Bill Provisions
2
Congress.gov. The Reconciliation Process: Frequently Asked Questions
3
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
4
Internal Revenue Service. What’s New – Estate and Gift Tax
5
Office of the Law Revision Counsel. 26 US Code 2010 – Unified Credit Against Estate Tax
6
Internal Revenue Service. Estate and Gift Tax FAQs
7
Office of the Law Revision Counsel. 26 USC 199A – Qualified Business Income
8
Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One, Big, Beautiful Bill