When Does the TCJA Sunset? SALT Cap, AMT, and Mortgage Interest

The scheduled sunset of the Tax Cuts and Jobs Act largely did not happen. Most individual provisions of the 2017 law were set to expire on December 31, 2025, but the One Big Beautiful Bill Act, signed on July 4, 2025, made the majority of them permanent, expanded a few, and gave one major provision a temporary extension with a hard deadline in 2030.¹

Why the TCJA Was Set To Expire

The Tax Cuts and Jobs Act of 2017 (Public Law 115-97) was passed through budget reconciliation.² Senate rules for that process required that the bill not increase the federal deficit beyond a 10-year window, so Congress made most individual tax cuts temporary and set them to expire on December 31, 2025.³

Without action, the code would have reverted on January 1, 2026, to something close to 2017 law adjusted for inflation. Rates would have climbed, the standard deduction would have been cut roughly in half, the estate tax exemption would have dropped, and the pass-through business deduction would have vanished. Congress acted first. Public Law 119-21 made most of the affected provisions permanent, and in several cases increased them.¹

Rates and the Standard Deduction Stayed

The seven-bracket structure with rates topping out at 37% is now permanent. The rate increases that would have taken effect in 2026 (back to 15%, 25%, 28%, 33%, and 39.6%) will not happen.⁴

The near-doubled standard deduction is also permanent. For 2026 it is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household. Without the new law, those figures would have dropped to roughly $8,350 for single filers and $16,700 for joint filers. The statutory base amounts under the amended code are $15,750 (single) and $23,625 (joint), with annual inflation adjustments beginning after 2025.⁵

What Is Gone for Good

Personal exemptions are not returning. Under pre-TCJA law you could claim about $4,050 for yourself and each dependent. The TCJA suspended that through 2025, and many taxpayers expected it to come back. It will not. The new law made the elimination permanent.⁴ For most households the larger standard deduction more than makes up the difference, but families with several dependents who counted on the return of the exemption will feel it.

Miscellaneous itemized deductions that exceeded 2% of adjusted gross income are also gone permanently. That category included unreimbursed employee expenses, tax preparation fees, and investment advisory fees. The TCJA suspended the deduction; the new law made the suspension permanent.⁶

The SALT Cap Is the One Real Deadline

The cap on the deduction for state and local income, sales, and property taxes is the one major TCJA provision that got a temporary fix rather than a permanent extension. The original $10,000 cap⁷ was raised to $40,000 for 2025 through 2029. The increase phases out for higher earners: joint filers with modified adjusted gross income above $500,000 see a reduced cap, and those above $600,000 are back at $10,000. Starting in 2030, the cap permanently reverts to $10,000 for everyone.

If your combined state income and property taxes exceed $40,000, you still lose the deduction on the excess during the five-year window. If you earn above the phase-out threshold, the raised cap barely helps. Anyone planning around state-level obligations should keep the 2030 reversion in mind.

What Got Bigger, Not Just Extended

The estate and gift tax exclusion did not just avoid the drop back to roughly $5 million per person that the sunset would have caused. The statutory base exclusion is now $15 million per individual, up from the TCJA’s $10 million,⁸ and the IRS has confirmed the 2026 figure at $15 million with inflation adjustments after that.⁴ A married couple can shelter up to $30 million. Estates above the exclusion are still taxed at rates up to 40%. Large gifts made from 2018 through 2025 are not clawed back; an estate uses whichever exclusion is higher, the one in effect when the gift was made or the one at death.⁹

The Section 199A deduction for pass-through business income was set to vanish entirely. Instead, it is permanent and rises from 20% to 23% of qualified business income starting in 2026. To qualify, a business generally needs to earn at least 75% of its gross receipts from a qualified trade or business. Existing restrictions on specified service businesses (law, accounting, health care, and others) remain in modified form, still phasing out the deduction for high-income owners in those fields. The corporate rate for C-corporations stays at the 21% the original TCJA made permanent.

The child tax credit was headed from $2,000 down to $1,000 per qualifying child. The new law took it to $2,200 per qualifying child under 17, with inflation indexing beginning in 2026.¹ Up to $1,700 is refundable, meaning a family that owes less than $2,200 in federal income tax can receive up to $1,700 as a refund. You need at least $2,500 in earned income to qualify for the refundable portion. The phase-out thresholds preserved from the TCJA are $200,000 for single filers and $400,000 for joint filers, with the credit decreasing by $50 for every $1,000 over those limits. Dependents who do not qualify as children under 17 can still be claimed for a nonrefundable credit of up to $500.

AMT and Mortgage Interest

The alternative minimum tax kept its higher TCJA exemptions. For 2026 the AMT exemption is $90,100 for single filers (phasing out at $500,000) and $140,200 for joint filers (phasing out at $1,000,000).⁴ Filers who were not hit by the AMT during 2018 through 2025 are unlikely to be hit now.

The mortgage interest deduction cap of $750,000 of acquisition debt is permanent, with the pre-December 16, 2017 grandfather still in place for older mortgages.¹⁰ The new law also permanently reinstated the deduction for mortgage insurance premiums beginning in 2026.

New Provisions That Did Not Exist Under the TCJA

The 2025 law added items that are not extensions of anything: Trump Accounts (tax-advantaged savings accounts for children, funded in part by a one-time $1,000 federal contribution), expanded eligibility for Health Savings Accounts covering bronze and catastrophic health plans starting in 2026, and a partially refundable adoption credit of up to $5,000.¹ Each has its own eligibility rules and effective dates worth reviewing separately.

For the typical filer, the structure that applied from 2018 through 2025 is largely the structure going forward. Rates, the standard deduction, the child tax credit, and the estate exclusion all survived, and several grew. The pieces that did not survive were the pieces already suspended. The SALT cap is the one place where the calendar still matters: the $40,000 cap runs through 2029, then drops back to $10,000 in 2030.

1
Internal Revenue Service. One, Big, Beautiful Bill Provisions
2
Government Publishing Office. Public Law 115-97
3
House Budget Committee Democrats. Budget Reconciliation Explainer
4
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments from the One, Big, Beautiful Bill
5
Office of the Law Revision Counsel. 26 USC 63 – Taxable Income Defined
6
Office of the Law Revision Counsel. 26 USC 67 – 2-Percent Floor on Miscellaneous Itemized Deductions
7
Congressional Research Service. The Limitation on Itemized Deductions in H.R. 1, the One Big Beautiful Bill Act (House-Passed Version)
8
Office of the Law Revision Counsel. 26 USC 2010 – Unified Credit Against Estate Tax
9
Internal Revenue Service. Treasury, IRS – Making Large Gifts Now Won’t Harm Estates After 2025
10
Internal Revenue Service. Publication 936 (2025) – Home Mortgage Interest Deduction