When Does the New Tax Law Take Effect: The Four Start Dates

The One, Big, Beautiful Bill Act was signed on July 4, 2025, but asking when the new tax law takes effect has no single answer: its provisions carry different start dates, and at least one is already gone. Some rules reach back to tax years beginning after December 31, 2024. Most individual changes anchor to tax year 2026. The restored 100% bonus depreciation applies to property acquired after January 19, 2025. And the clean vehicle credits expired for vehicles acquired after September 30, 2025.¹

The section that matters to you depends on which provision you are trying to use.

The Four Kinds of Start Dates in One Bill

A tax bill rarely turns on at a single moment. Congress typically writes one of four timing rules into each provision:

Calendar-year start. “For taxable years beginning after December 31, 20XX.” This aligns with how individuals file, so one set of rules governs the whole year.
Acquisition or placed-in-service date. Common for depreciation and investment incentives. The benefit ties to when you buy an asset or put it to use, not to a tax year.
Retroactive. The effective date falls in a tax year already underway or already closed.
Sunset. A built-in expiration that ends the provision automatically unless Congress extends it.

The OBBB uses all four.¹

Provisions That Reach Back to Tax Year 2024

Several OBBB provisions apply to taxable years beginning after December 31, 2024, meaning they cover a year that began before the law was signed. Two examples:

The deduction for domestic research and experimental expenditures.
Up to $5,000 of the adoption credit becoming refundable.¹

If you already filed a 2024 return and one of these changes benefits you, you can claim the additional credit or refund on Form 1040-X, the amended individual return. File the amended return only after the original has been processed.²

The refund window is short. You must generally file the amended return within three years of your original filing date or two years from when you paid the tax, whichever is later.³ A retroactive law change does not automatically extend that deadline; unless Congress explicitly says otherwise for a specific provision, the standard statute of limitations still runs.⁴

What Starts for Individuals in Tax Year 2026

Most individual changes apply to income earned in the calendar year that begins January 1, 2026. The OBBB made permanent the seven-bracket rate structure from the Tax Cuts and Jobs Act, which had been scheduled to expire on December 31, 2025. For 2026 the brackets are:⁵

10%: up to $12,400 single / $24,800 married filing jointly
12%: over $12,400 / $24,800
22%: over $50,400 / $100,800
24%: over $105,700 / $211,400
32%: over $201,775 / $403,550
35%: over $256,225 / $512,450
37%: over $640,600 / $768,700

The standard deduction for 2026 is $16,100 for single filers and $32,200 for married couples filing jointly, and the OBBB indexed these amounts for inflation going forward.⁵⁶ The child tax credit for 2026 is $2,200 per qualifying child, with up to $1,700 refundable, and both figures now adjust annually.

The Section 199A qualified business income deduction for pass-through owners was made permanent and increased from 20% to 23%. The estate and gift tax basic exclusion amount was set at $15,000,000 for 2026.⁷ Without the OBBB, both figures would have reverted after 2025.¹

A note on paychecks: the IRS updates withholding tables in Publication 15-T, and employers have time to load new figures into their systems. For electronic W-4 systems, the general window is up to 90 days when no specific deadline is set. For substitute withholding forms, it is 30 days after the IRS releases the final version or January 1 of the applicable year, whichever is later.⁸ Your withholding may not match the new rules the moment a law is signed.

Business Changes Tied to When You Buy or Place Property in Service

Depreciation rules do not follow the calendar. They follow the date property is “placed in service,” which is the date it is ready and available for use in your business, not necessarily the day you paid for it.⁹

Under the TCJA schedule, bonus depreciation was phasing down: 80% for 2023, 60% for 2024, 40% for 2025, and zero by 2027. The OBBB reversed that decline and permanently restored 100% bonus depreciation for qualifying property acquired after January 19, 2025. Businesses can alternatively elect a 40% deduction, or 60% for property with longer production periods or certain aircraft, for the first tax year ending after January 19, 2025.¹⁰

If your acquisition date fell before that cutoff or the asset doesn’t qualify, the deduction spreads over the asset’s normal recovery period, from 3 years for some short-lived equipment up to 39 years for nonresidential real property.¹¹

Credits That Have Already Expired

Not everything in the OBBB extends a benefit. The new, used, and qualified commercial clean vehicle credits expired for vehicles acquired after September 30, 2025.¹ The acquisition date, not the delivery or registration date, governs eligibility.

Fiscal-Year Corporations and the Blended Rate

If your business operates on a fiscal year that does not match the calendar and a rate change falls in the middle of that year, you cannot simply pick the old rate or the new one. Under 26 U.S.C. § 15, you compute two tentative amounts, one using the old rate on the full year’s income and one using the new rate on the full year’s income, then weight each by the number of days that fell before and after the change.¹² The IRS applied this method when TCJA moved corporate tax to a flat 21% for fiscal years straddling January 1, 2018.¹³ The flat 21% corporate rate itself is unchanged under the OBBB.¹⁴

Estimated Tax Payments When the Rules Change Mid-Year

A law that changes your liability partway through the year can throw off your quarterly estimated payments. To avoid an underpayment penalty, pay the lesser of:

90% of the tax you will owe for the current year, or
100% of the tax shown on your prior year’s return, which rises to 110% if your adjusted gross income exceeded $150,000, or $75,000 if married filing separately.¹⁵

Meeting either safe harbor protects you even if the final bill is higher. If a new provision only affects income earned later in the year, the annualized income installment method lets you calculate each quarterly payment on income actually earned through that quarter’s cutoff, instead of projecting from the prior year. For the 2025 tax year, the IRS issued specific penalty relief tied to certain OBBB provisions, including the farmland capital gains installment election.¹⁶

Before you rely on any single date, check which timing rule the specific provision uses. A calendar-year rule, an acquisition-date rule, and a retroactive rule can all sit in the same law, and treating them alike is how filers miss deductions or pay penalties they could have avoided.

1
Internal Revenue Service. One, Big, Beautiful Bill Provisions
2
Internal Revenue Service. About Form 1040-X, Amended U.S. Individual Income Tax Return
3
Internal Revenue Service. Amended Returns and Form 1040-X
4
Internal Revenue Service. Statute of Limitations Processes and Procedures
5
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
6
Office of the Law Revision Counsel. 26 USC 63 – Taxable Income Defined
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Internal Revenue Service. What’s New – Estate and Gift Tax
8
Internal Revenue Service. Publication 15-T Federal Income Tax Withholding Methods for Use in 2026
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Office of the Law Revision Counsel. 26 USC 168 – Accelerated Cost Recovery System
10
Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One, Big, Beautiful Bill
11
Internal Revenue Service. Publication 946 – How To Depreciate Property
12
Office of the Law Revision Counsel. 26 USC 15 – Effect of Changes
13
Internal Revenue Service. 2018 Fiscal Year – Blended Tax Rates for Corporations
14
Office of the Law Revision Counsel. 26 USC 11 – Tax Imposed
15
Office of the Law Revision Counsel. 26 USC 6654 – Failure by Individual to Pay Estimated Income Tax
16
Internal Revenue Service. 2025 Instructions for Form 2210 – Underpayment of Estimated Tax by Individuals, Estates, and Trusts